The Government’s plan to abolish a number of tax measures could cost individuals and businesses several thousands of dollars.
It is important to be aware of these potential changes as decisions pre and post 1 January 2014 could have serious implications.
Below are some of the potential changes, however, take note that these changes are still yet to become law:
Reduction in instant asset write-off threshold
Small business (generally those with a turnover of less than $2 million) can currently claim an immediate deduction for depreciating assets costing less than $6,500. From 1 January 2014, this threshold will drop to $1000.
$5000 deduction for motor vehicles scrapped
From 1 January 2014, the $5000 immediate deduction for motor vehicles purchased by small businesses will be removed. If businesses are considering purchasing a motor vehicle they have until 31 December 2013 to be able to claim the deduction.
Loss carry back measures
The loss carry back measures allows companies to offset tax they have paid in the previous years against current year losses. The repeal of this measure will mean that companies will only be able to use the loss carry back measures for the 2013 income year.