A look back at tax changes in 2014

It’s Christmas in a few days which means that it’s almost the end of another year. The end of the year is a great time to review what has happened, both good and bad. As this is a bookkeeping blog, I thought it would be a good idea to take a look back at how the tax world has changed in 2014. The following is a summary of various tax changes.

Superannuation changes:

• Super guarantee increased to 9.5% on 1 July 2014. It will remain at that rate until June 30 2021 after which time it will increase by 0.5% each year until it reaches 12% in 2025-26.
• Superstream came into effect on 1 July 2014. Superstream is the new data and payment standard that requires all super guarantee payments and associated data be transferred to super funds electronically. Employers with 20 or more staff were required to use the standard from July 1 2014 whereas those with 19 or fewer staff have until July 1 2015 to get ready.
• The ownership of the Small Business Superannuation Clearing House was transferred from the Department of Human Services to the Australian Taxation Office (ATO) on 1 April 2014.

General changes:

• ATO app – 2014 saw the release of the new ATO app. It’s available for Android and iOS and allows both individuals and business owners to access a myriad of tax and super information on the go.
• Instant asset write-offs: the amount small business can claim as an immediate tax deduction on business assets has been reduced from $6,500 excl GST to $1000 excl GST as of 1 January 2014. This relates to assets first used or installed ready for use on or after 1 January.
• Accelerated depreciation of motor vehicles: small business can no longer claim an accelerated depreciation tax deduction of $5,000 excl GST on the purchase of new or secondhand vehicles. Due to the mining tax repeal bill, this amount has been reduced to $1,000 excl GST as of 1 January 2014.
• Repeal of company loss carry back rules: as of 1 July 2013, these rules will no longer apply which means you cannot claim the loss carry-back tax offset for the 2013-14 income tax year. See here for more information.

Changes for employers:

• Tax table updates: make sure you are using the correct tax tables from 1 July 2014 because 2 important tax updates have changed the amount you should withhold from employees’ wages. These tax updates include the 2% Temporary Budget Repair Levy (TBRL) and an increase to the Medicare Levy rate to 2%. The TBRL affects those with incomes over $180,000 and will remain in place until 30 June 2017.
• Fringe Benefits Tax (FBT) rate increase: one of the effects of the TBRL is that from 1 April 2015, the FBT rate will temporarily increase from 47% to 49%.
• Tax file number not quoted withholding rate increased to 49% from 1 July 2014. This means if your employee has not provided you with a TFN or claimed an exemption, you must withhold 49% from his/her wages.
• ABN not quoted withholding rate increased to 49% from 1 July 2014 – you must withhold 49% from payments to suppliers if they do not quote their ABN to you.

GST_BAS related changes:

• Fuel tax credits: each year the ATO adjusts the FTC rates – see the current rates here. FTC rates have changed as of 1 July 2014 because of the carbon tax repeal i.e. the carbon charge has been removed from FTC’s.
• No more paper BAS. From 1 July 2014, if your BAS is lodged electronically, the ATO will no longer send out a paper version of the BAS.

So there you have it, a summary of how the tax landscape has changed in 2014! I hope you found it useful. There have been many changes mainly due to movements in Federal Government and the resulting stringent budget set down by the Abbott Government. Lately, there have also been rumblings about increasing and broadening the GST rate and although Tony Abbott continues to claim that this will never happen, I wouldn’t be too sure …….. watch this space!

As this is my last blog for 2014, I would like to take this chance to wish all of my readers old and new, a very happy Christmas and a safe and fun New Year’s celebration. Until I put fingers to the keyboard again, it’s bye for now and I look forward to bringing you more bookkeeping news and updates in 2015.