Landlord plant and equipment depreciation deductions limited

Landlord plant and equipment depreciation deductions limited

Landlord plant and equipment depreciation deductions limited to actual outlays from Tax & Super Australia – 17/1/2018

The government has made good on a measure announced in its 2017 Federal Budget, and now limits plant and equipment depreciation deductions to outlays actually incurred by investors.

In essence, unless a taxpayer as the investment property buyer have physically purchased the assets to be depreciated, they can no longer do so. In other words, if otherwise depreciable assets came with the investment property purchased, there will no longer be an option to continue depreciating those assets in the property owner’s hands.

Under legislation passed into law late last year, income tax deductions for the decline in value of previously used plant and equipment in rental premises used for residential accommodation are no longer allowed.

The changes apply from 1 July 2017 to:
• previously used plant and equipment acquired at or after 7.30 pm on 9 May 2017 unless it was acquired under a contract entered into before this time
• plant and equipment acquired before 1 July 2017 but not used to earn income in either the current or previous year.

There are two types of allowances available in regard to depreciation for investment properties — depreciation on plant and equipment, and depreciation on building allowance. But it is the former that has been changed, with the latter remaining at status quo.

The silver lining is that the changes won’t have any affect for investors who already bought their rental property before the changes were announced on Budget night 2017 (that is, the contract exchange date is before 7.30pm on May 9, 2017).

Taxpayers are quite entitled to claim depreciation on any item actually purchased, and can claim this over the effective life of that asset while they remain the owner.

Ostensibly, this measure is a government attempt to reduce pressure on housing affordability. There is also an element of stamping out double dipping. According to the budget statement, “this is an integrity measure to address concerns that some plant and equipment items are being depreciated by successive investors in excess of their actual value”.

The changes do not affect deductions that arise in the course of carrying on a business, or for:
• corporate tax entities
• superannuation plans other than self-managed superannuation funds
• public unit trusts
• managed investment trusts
• unit trusts or partnerships whose members are the above listed entities.

News on Company Tax Rate & Mid Year Fiscal Outlook

News on Company Tax Rate & Mid Year Fiscal Outlook

News on Enterprise tax plan – reducing the corporate tax rate

 

The Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2017 was introduced to the House of Representatives on 18 October 2017 but is not yet law. This Bill proposes to remove the ‘carrying on a business’ test from the 2017–18 income year onwards and introduces a passive income test in determining which companies are subject to the lower corporate tax rate.

For more information see the Reducing the corporate tax rate new legislation page.

 

2017-18 Mid-Year Economic and Fiscal Outlook (MYEFO)

 

The Government released the 2017–18 MYEFO on 18 December 2017, with several proposed changes to tax and superannuation laws. Below is a list of the announced measures, including start dates (as announced by Government, but dependent on passage of legislative amendments through parliament). You can access the papers here: budget.gov.au

 

List of announced measures

Measure name

Proposed start date

Pacific labour scheme

1 July 2018

Seasonal worker programme – improving take up and streamlining administration

1 July 2018

Capital gains tax – main residence exemption – application to temporary residents

Various

Expanding tax incentives for investments in affordable housing

1 January 2018

Personal income tax – exemption of JobSeeker Payment for newly bereaved recipients

20 March 2020

Personal income tax – exemption for Australian participants of British nuclear tests and veterans of the British Commonwealth Occupation Force

2017-18

Company tax – passive investment companies excluded from lower company tax rate

2017-18 income year

Single Touch Payroll – deliver a tax incentive for small business to invest in standard business reporting enabled software – reversal

N/A

Superannuation – closing salary sacrifice loopholes

From 1 July 2018

Superannuation guarantee integrity package – modernising payroll and superannuation fund reporting

2018-19 financial year (transitional)/1 July 2019 (full implementation)

Superannuation guarantee integrity package – more effective collection of superannuation guarantee liabilities

1 July 2018

Superannuation guarantee integrity package – reversal of 2014-15 MYEFO measure – Superannuation guarantee charge

N/A

Superannuation guarantee integrity package – stronger penalties for superannuation guarantee

TBA

Superannuation guarantee integrity package – superannuation guarantee compliance taskforce

N/A

Additional foreign investment amendments

TBA

Debt-Equity rules – allowing debt tax treatment for tier 2 capital issued by customer-owned banks

Day after registration of amending regulation

Tax integrity – Extension of the OECD hybrid mismatch rules

Six months after royal assent

International tax – adoption of the multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting

Various

Reducing Pressure on Housing Affordability – Affordable housing through MITs – modification

1 July 2017

Technical amendments to venture capital and innovation programs

Various

GST on low value imported goods – modification

1 July 2018

Improving the integrity of GST on property transactions – transitional arrangements

As a transitional arrangement, contracts signed before 1 July 2018 and settled before 1 July 2020 are to be excluded

Wine equalisation tax rebate tightened eligibility – transitional rules for wine producers

1 July 2018

Deductible gift recipient reform – strengthening governance and integrity and reducing complexity

Various

Extending deductible gift recipient eligibility to organisations promoting indigenous languages

TBA

Philanthropy – updates to the list of specifically listed deductible gift recipients

Various

Philanthropy – managing the risks of overseas philanthropy

TBA

Indirect tax concessions scheme – diplomatic and consular concessions

TBA

Heavy vehicle road reforms – next steps

TBA

Higher education reforms – revised implementation

Various

Junior Minerals Exploration Incentive Scheme – establishment

2017-18

National business simplification initiative – modernising business registers

N/A

VET Student Loans – separation from the Higher Education Loan Program

1 July 2019

 

 

 

Capital allowances: draft effective lives of assets used in the fruit and vegetable processing industry

Capital allowances: draft effective lives of assets used in the fruit and vegetable processing industry

Proposed new determinations effective asset lives in fruit and vegetable industry

The ATO propose to add the following list of effective life determinations to the Commissioner’s schedule to apply to assets purchased (or otherwise first used or installed ready-to-use) on or after 1 July 2018 (within the meaning of section 40-95 of the Income Tax Assessment Act 1997).

Tell the ATO what you think

The ATO is seeking comments on the draft list of effective lives to be released for assets used in the fruit and vegetable processing industry. Comments are open until 15 January 2018. If you disagree with a proposed effective life, tell them why a different effective life should be recommended.
Send your comments or questions to Kim Dziedzic by 15 January 2018:
• phone (07) 3213 5764
• fax (07) 3119 9901
• email kim.dziedzic@ato.gov.au

Fruit and vegetable processing (ANZSIC code 11400)

Dried fruit manufacturing assets (other than sun-dried)

Packaging assets:

Asset Life (years)
Box sealers (including taping machines) 10
Carton erecting, packing and closing machines (including cartoners) 15
Form, fill and seal machines see Table B Packaging machines
Labellers see Table B Packaging machines
Multihead weighers see Table B Packaging machines
Palletisers see Table B Packaging machines
Wrapping machines, including pallet wrappers. shrink wrappers and stretch wrappers – see Table B Packaging machines

Processing assets:

Aspirators 20
Cappers and destemmers 15
Cookers 15
Cooling tunnels 15
Drying assets (including dehydrators and dryers) 20
Mixers 15
Pitters 15
Riddles (including pre-riddles and rotary sieves) 15
Shaker tables 15
Sulphur tanks 15
Washing assets (including barrel washers, brush washers and ripple washers) 15

 

Product and raw material handling assets:

Asset Life (years)
Bins 10
Bin tippers 15
Conveyors and elevators 15

 

Quality control and inspection assets:

Asset Life (years)
Colour sorters and laser scanners 10
Inspection equipment including checkweighers, metal detectors see Table B Packaging machines
Testing equipment 15

 

Support assets:

Asset Life (years)
Coolrooms see Table B Refrigeration assets
Weighers 20

Canned, bottled or preserved fruit and vegetable manufacturing assets

Packaging assets:
Asset Life (years)
Carton erecting, packing and closing machines (including cartoners) 15
Labellers 10
Palletisers and depalletisers see Table B Packaging machines
Pallet wrappers and stretch wrappers see Table B Packaging machines

 

Filling and sealing assets:

Asset Life (years)
Canning assets (including can loaders, closers and seamers) 10
Capping machines: Cappers 10
Capping machines: Induction sealers 5
Filling machines (including aspectic, bag in box, cup, direct, piston) 10

 

Processing assets:

Asset Life (years)
Blanchers and paste finishers (including bean, spaghetti) 12
Concentrates and syrup assets (including centrifuges, decanters and syrupers) 15
Cookers: Rotary atmospheric sterilisers 20
Cookers: Rotary pressure sterilisers 10
Cookers: Static retorts 15
Crushing mills 30
Graders 15
Peelers: Chemical (including caustic peelers) 10
Peelers: Mechanical (including ginacas and magnesium scrubbers) 5
Pitters and re-pitters 20
Slicers and re-sizers 15

 

Quality control and inspection assets:

Asset Life (years)
Colour sorters 10
Inspection equipment including checkweighers, metal detectors see Table B Packaging machines

 

Support assets:

Asset Life (years)
Bin tippers 20
Control systems see Table B Control systems and control system assets
Conveyors and elevators 15
Filtration systems 15
Pasteurisers (including heat exchangers) 10
Pumps 10

Jam, pickles and sauce manufacturing assets

Packaging assets:
Asset Life (years)
Carton erectors 12
Labellers see Table B Packaging machines
Palletisers 10
Pallet wrappers and shrink wrappers see Table B Packaging machines

 

Filling and sealing assets:

Asset Life (years)
Bottle rinsing machines 10
Capping machines 15
Denesters 10
Filling machines (including aseptic, bucket, portion control) 15
Jar depalletisers 15
Lid descramblers, cap sorters, hoppers 15

 

Processing assets:

Asset Life (years)
Brush finishers and pulper finishers 15
Cookers 10
Cooling tunnels (including water cooling tunnels) 15
Micro filters 20
Pasteurisers 15
Pectin mixers 10
Pipes and pipelines (pigging) 15
Tanks and vats (including blending, holding and mixing tanks) 15

 

Quality control and inspection assets:

Asset Life (years)
Metal detectors and camera vision scanners 10

 

Support assets:

Asset Life (years)
Accumulation tables and turntables 15
Air compression assets (including air compressors, air dryers and air receivers) 10
Boilers see Table B Boilers
Conveyors 15
Exhaust systems 10
Heat exchangers 10
Pumps (including cavity, diaphragm, lobe) 15

See also TR 2017/2 – Income tax: effective life of depreciating assets

Private use of exempt motor vehicles for FBT

Private use of exempt motor vehicles for FBT

Eligible Motor Vehicles by Employees

The ATO have released a draft practical guideline on the private use of eligible motor vehicles by employees. Where private use of these vehicles by your employees is limited, some fringe benefits tax (FBT) car-related exemptions may apply.

The guideline explains when the Commissioner will not apply compliance resources to determine if the private travel was limited to travel for the purposes of the car-related FBT exemptions where travel is:
• between employees’ home and workplace; and
• is minor, infrequent and irregular.

When finalised, this guideline will apply from the 2018 FBT year and onwards.

The Guideline

To see the guideline click here. This guideline is open to comment until 9 February 2018.

Is paying off your HECS early worth it?

Is paying off your HECS early worth it?

From ABC News, By Jessica Haynes Updated 21 Nov 2017, 7:08pm

It is often called the “best loan you’ll ever get”.

So, should graduate students try and put their money to work elsewhere?

Or, should they pay down their student loans as quickly as possible?

We asked one expert what you should prioritise.

Is your student loan (HELP debt) really the best one you’ll ever have?

Griffith University Business School lecturer Tracey West said that was probably true.
Why?

Because of its low interest and high payback income threshold.

“HELP is known as an income-contingent loan, meaning repayments are only collected once your income meets a threshold — currently $55,874 per annum in 2017-18,” Dr West said.”

“The current repayment rate is 4 per cent of taxable income on this lower threshold, and rises by income bands to 8 per cent above $103,766 per annum, and the employer withholds this repayment alongside withholding tax.”

“The value of the student debt is indexed to the CPI [Consumer Price Index] each year, which was 2.1 per cent in March 2017.”

“Thus, based on these factors, HELP is the ‘best loan you’ll ever get’.”

So, if you have other debts what should you do?

Pay them off first.

“Absolutely, a person should repay a car loan, credit card, home loan, or other debt that has higher interest rates because it compounds more quickly over time, and because their behaviour in loan repayment [or lack thereof] will impact their credit rating,” Dr West said.

And considering Australia’s household debt is among the world’s highest, it is probably not a bad idea to start paying those down anyway.

Will the way student loans work ever change?

It could, if the Federal Government has its way.

“Two major changes [include] reducing the repayment threshold to $42,000, with a reduction in the repayment rate to 3 per cent, and to change the indexation to be linked to the bond rate [of government borrowing] rather than CPI,” Dr West said.

“This means debt holders will start repayments earlier and the debt will compound faster.”

A spokesman for the Federal Education Department told the ABC the reduction in the repayment rate would be 1 per cent and the Government, “has not proposed applying the bond rate in the legislation currently before the Parliament”.

Is it ever worth paying off your student loans earlier?

Dr West said consensus on student debt seems to be set and forget as it takes care of itself.

“In the early career phase of an individual this approach makes a lot of sense, as acquiring other assets and lifestyle demands take priority, like a car, travelling [and] saving for a home deposit,” she said.

“However, as with other debts, the HELP debt is still compounding over time, albeit at a low rate.

“Thus, making voluntary contributions will help pay down the loan faster, and when paid off, wages are no longer deducted … effectively a pay rise.”

Does paying off your HECS early help at tax time?

Not anymore.

“There are now no tax benefits associated with early repayment of HELP debt,” Dr West said.

“From January 2017, discounts on up-front contributions to the education provider and voluntary payments of $500 or more to HELP debt were discontinued.”

And Dr West said you also might have less idea of what you actually owe.
“The ATO ceased mailing out account statements in 2013, so many students may be unaware of their HELP debt balance.”

You can find this info out through the ATO’s website or through your tax accountant.

How much can you expect a HECS debt to increase if you just leave it?

“If you assume an average inflation rate of 3 per cent per annum, a HELP debt of $20,000 will accumulate to $26,900 in 10 years’ time, with no repayments,” Dr West said.

But there are not actually any calculators available to help you figure that out.

“It is actually a project proposal that I am working on along with a financial literacy education program that is linked to students with HELP debt.”

Dr West says even she had some regret about not paying more of her HELP debt down earlier

“I have first-hand experience with an accumulated HELP debt after participating in quite a few study programs, and not meeting the income repayment threshold until later in life,” she said.

“Now that I have a young family and mortgage commitments, my mind has turned to ways that I can increase my disposable income, and paying off HELP debt is one way.

“Unfortunately, it has accumulated to quite a hefty amount, so it will require a concerted effort to pay it down, and I’m better off investing that extra money in the stock market.

“I have some regrets about not being conscious of the impact of student debt on my future cash flow earlier in life, and quite honestly didn’t give it much thought. ”

Tax tips for Airbnb hosts

Tax tips for Airbnb hosts

Airbnb is one of the most popular ways of making an income on the side. But what Airbnb tax impacts should you look out for?

Airbnb offers a great opportunity to rent out that spare room without the long-term commitment. Or, it’s a handy way to lease a holiday home that would be quiet for much of the year. Both of these things are great – but some Airbnb hosts may not realise the effects and benefits come tax time.

Australian Airbnb tax information for Australia can be tricky to find, so let’s try to touch on some important bits right here…

Extra income means extra taxes to pay at year-end

Warning: When you add a new source of income like Airbnb, don’t just treat that income as spending money.
Why not spend all your Airbnb income? Because earning that extra income means you’ll be charged more tax by the ATO at the end of the year. It is important to save some of what you earn through Airbnb so you can pay the ATO at tax time.

Don’t just save a few dollars!

In the first year when you top-up your income with untaxed earnings from bnb hosting and other types of ‘side businesses’, you might need to save as much as 30 or 40 per cent of your new earnings for tax! The amount depends on the total income you earn and the amount of tax deducted from your other income sources. Your tax agent can help you predict the right amount you should save for the “tax man.”

Renting out that spare room or property can bring in some useful extra cash – plus you can meet nice, interesting people. But be careful about your Airbnb tax obligations and tax benefits – there is a lot to gain, or a lot to lose.

“Re-renting” a rented property on Airbnb

According to Victoria’s Department of Consumer Affairs, if you rent your property from someone else, you need written consent from your landlord if you want to list it (or part of it) on Airbnb.

When you rent out a room through Airbnb, you’re technically offering a short term sub-let agreement, which in some states requires a tenancy agreement. A confusing aspect of Airbnb is that regulations are still being made and can differ from state to state. Consider the risks involved before listing your property, or talk to your landlord or real estate agency first. You’ll also need to check your rental agreement or lease plus Body Corporate laws if you live in an apartment complex. This is serious stuff – don’t just ignore it or try to be sneaky by re-renting property on Airbnb; you could get into a lot of trouble!

“If I own my property, can Airbnb trigger CGT?

Capital Gains Tax (CGT) is payable when you sell a rental home. This can be a hefty tax bill.

CGT is usually not payable on your family home. HOWEVER, if you rent out your family home (or a part of it), even just a room on Airbnb, suddenly your family home is viewed differently by the ATO; when you sell it, you may face an ATO tax bill for CGT.

The income you make from being a host will usually outweigh the later effect of CGT, but not always. It’s something you need to consider carefully.

Airbnb Tax benefits


Renting a room out of your existing property does create some income and tax perks.

You can claim expenses and depreciation for the percentage of the area of your house that was available for rent.

Airbnb tax advantages can include properly-calculated portions of…
• Internet and phone costs
• Water, power and council rates
• Upkeep and repairs
• Depreciation on the cost of furnishings and equipment
• Interest on your mortgage

Those can add up to a decent set of tax deductions for Airbnb hosts.

You’ll need to keep a record of when the room was actually rented in order to correctly claim expenses, but for a regular host, it often pays off.

Simple record-keeping saves big $$$ at tax time

Keep records for everything to do regarding the room or property… the same as you would for a regular tenant.

This paperwork, come tax time, will ensure you can claim everything related to Airbnb tax and expenses. You just need to save receipts and notes about what they’re for. It’s easy. Don’t get carried away over-organising it. The important part is that you just stay in the habit of keeping evidence for expenses.

Don’t try to hide your Airbnb income
If you’re using this source of income, it’s out there for everyone to see. The ATO can track this income easily, so even if you’re not earning a lot of money, keep your records and be honest about the income you’ve generated from the property.

The ATO is not “laid-back” about people who under-claim rental income and it can lead to back taxes owing plus new fines, penalties and interest charges.

In summary, if you aim to host a room or rent your property:

• understand the tax implications of being an Airbnb host,
• don’t hide or under-claim this income; the ATO can spot your Airbnb income from a mile away,
• save your expense receipts and notes, and
• talk to your tax agent (like www.eagletax.com.au) about how to properly claim all of your expenses, so you make the most of those tax deductions!

Tax Update 2017

Tax Update 2017

The key announcements from the 2017 Federal Budget that may have an impact for year-end tax planning include:

  • Removal of the main residence exemption for non-residents and temporary residents for properties purchased after Budget night
  • An annual levy of at least $5,000 will be imposed on foreign owners of under-utilised residential property
  • Removal of deductibility for travel expenses incurred to inspect a residential rental property from 1 July 2017
  • Restriction on availability of depreciation deductions for items in rental properties when property purchased from 1 July 2017
  • Extension of the $20,000 asset write off for small businesses ($10 million turnover) until 30 June 2018
  • Technical amendments to qualifying criteria for small business CGT concessions (full details not yet available)
  • The Medicare levy will be increased from 2.0% to 2.5% of taxable income from 1 July 2019.

Superannuation

The key superannuation announcements in the 2016 Budget have now been legislated and will take effect from 1 July 2017.

The amendments have introduced a significant number of restrictions on the quantum of contributions to funds and on member balances. In addition, there are planning opportunities for contributors to super funds prior to 30 June 2017.

From 1 July 2017 reduced contributions caps – $25,000 for concessional and $100,000 for non-concessional.

INDIVIDUALS TAX RATES

The temporary debt levy was introduced in 2014/15. Taxpayers with a taxable income in excess of $180,000 were liable to an additional tax of 2% of income in excess of $180,000. The levy is due to expire on 30 June 2017.

When the levy expires, there are advantages for affected taxpayers to defer recognising income and capital gains until after 30 June 2017 and to accelerate deductions prior to 30 June 2017.

In addition, from 1 January 2017, special rates have taken effect for backpackers and other working travellers.

SMALL BUSINESS

Small business company tax rate

From 1 July 2016, the income tax rate applicable to companies carrying on a business will reduce to 27.5%. The reduction will progressively apply to companies based on their aggregated turnover in the years in question. The 27.5% tax rate will apply to companies as follows:

Year Ended 30th June Turnover
2017 $10 million
2018 $25 million
2019 $50 million

The amendments to the company tax rate will also have implications for companies paying dividends.

Over-franked dividends

The franking credit rate for the year ended 30 June 2017 will be 27.5% where the company’s aggregate turnover for the previous year (2016) was less than $10 million. If the company has made a 30% franked distribution and dividend statement after 30 June 2016, the dividend will be over-franked and result in loss of franking credits.

Trapped franking credits

If the company pays a franked dividend based on profits of a previous year where the company’s tax rate was higher than current year, there may be trapped franking credits e.g. previous year rate 30% and current year rate 27.5% then 2.5% franking credits trapped in company.

Increase of the unincorporated small business tax discount

From 1 July 2015, individuals and individual partners in a partnership with business income of less than $2 million have enjoyed a tax discount of 5% of tax paid on business income. This discount amount is capped to $1,000 per individual.

From 1 July 2016, the tax discount has increase to 8% and the annual aggregated turnover threshold has increase to $5 million. The discount rate will progressively increase in the following years, but the maximum rebate will remain at $1,000 pa.

SUPER GUARANTEE

The rate for superannuation contributions by employers on behalf of their employees under the SGC for the year ended 30 June 2017 is 9.5%.

Employers must make superannuation guarantee contributions for their employees on a quarterly basis within 28 days after the end of each quarter (September, December, March and June).

Tax Update 2015

Tax Update 2015

The May 2015 Federal Budge contained a number of announcements involving the taxation of small business. A small business has an individual or aggregated turnover less than $2M. Listed below is a summary of the main changes.

Tax Cuts

Companies

From 1 July 2015, the company tax rate will reduce from 30% to 28.5%.

The dividend franking rate will remain at 30%. In some cases, there may be fewer franking credits to pass on to shareholders based on the franking account balance.

Individuals

A 5% discount will be provided to individuals who receive business income from unincorporated entities such as sole traders, trusts and partnerships.

The discount will be paid in the form of a tax offset capped at $1000 per person each year.

Immediate Deduction for Professional Fees

It is proposed that, as from July 2015, start up business will be able to claim establishment costs (e.g. professional, legal and accounting advice) as an immeidate tax deduction.

Acclerated Deprecation

Eligible assets aqured and ready for use between 12 May 2015 and 30 June 2017 can be claimed as an immediate tax deduction.

Eligible assets include most capital assets (e.g. cars, equipment, computers) costings less than $20,000.

FBT Concessions

As from 1 April 2016, small business employers will be able to provide employees with more than one portable electronic device (e.g. laptop, tablet) without attracting any FBT liability.

Work Related Car Expenses

From 1 July 2015, taxpayers will only have 2 methods available to claim work related car expenses – logbook and cents per kilometer method.

Under the cents per kilometer method, there will be a flat rate of 66 cents per kilometer regardless ofthe engine size (limit of 5,000 kilometers).

Article from AFR 3rd June 2014

The Australian Tax Office has indicated it will not rule favourably on a well-known wealth cration strategy in which investors lend moeny to their self-managed fund at zero or low interst rates, The Australian Financial Review reports.

The strategy is designed to circument the limit on post-tax superannuation contributions — currently $25,000 but rising to $30,000 in July by increasing the amount of money taxed at the lower rates which apply to superannuation.

Advisers todl the newspaper that the ATO suggested at a meeting last week that is did not approve of the strategy and would not deliver favourable rulings to taxpayes looking to use it.

The AFR reports that in the last month the ATO has received applications for more than 20 private rulings on the strategy, with many more expected, according to specialised lawyer Suzanne Mackenzie of DMAW Lawyers.

“Trustess of super funds are wasting their time and thte $2000 to $3000 it could cost them in expert advicer fees for a private ruling they hope will aloow them to implement the strategy,” she said.

Work Related Expenses

With $18 billion in work-related expenses being claimed each year, the ATO says it will continue to pay close attention to these claims to make sure they are correct.

The ATO focuses on occupations with a pattern of large or rising claims, as well as claims which do not fit the pattern for a particular occupation.
Whats new this year?
The year the ATO is writing to around 218,000 people employed in the following occupations:
1. building construction project managers and supervisors
2. building construction labourers; and
3. sales and marketing mangers

An example of mistakes that the ATO sees involved a sales manager who claimed for mobile phone calls based on the time spent at work, rather than the work-related use of the mobile phone.

Travel to work claims
Many building construction labourers drive a vehicle to work each day.

If they can prove they have had to carry bulky equipment then this travel becomes a deductible expense, as long as:

1. they can verify that their employer requires them to carry such equipment as part of their job; and
2. there is no alternative storage solution at the workplace. If the employer does provide secure storage, then the deduction cannot be claimed.

Government Co-Contributions – Superannuation

The government co-contribution initiative is designed to help people who
earn under $46,920* a year save more money for a sweeter retirement.

If you’re eligible, and make a personal after-tax contribution into your
REST super account by 28 June 2013, the government could match each
dollar with fifty cents up to $500*

How are the fuel tax credit rates changing?

From 1 July 2013, fuel tax credit rates are changing. You may be affected by:

  • some rate changes due to increased carbon charge amounts
  • rate changes for transport and non-transport gaseous fuels
  • a possible rate change for fuels used in heavy vehicles for travelling on public roads.

In addition, rates for some fuels are changing for entities declared by the Clean Energy Regulator to be a designated opt-in person under the opt-in scheme.

When you calculate your fuel tax credit claim, you need to use the rate that applied when you acquired the fuel. However, for fuel used in heavy vehicles for travelling on a public road, you need to use the rate in effect at the beginning of the tax period covered by your business activity statement (BAS).

You will continue to claim your fuel tax credits on your business activity statement.

  • The fuel tax credit rates for fuel acquired from 1 July 2013 will be published on our website closer to the date.
  • Fuel is taxable if excise or customs duty must be paid on it or it is a non-transport gaseous fuel the carbon pricing mechanism applies to.

Liquid fuels are petrol, diesel and other combustible fossil fuels such as kerosene, mineral turpentine, white spirit, toluene, heating oil, recycled oil and some solvents. Fuel ethanol and biodiesel are not included as they have no effective fuel tax and are not fossil fuels.

Gaseous fuels are liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG) and can be either:

  • transport gaseous fuels intended for use in an internal combustion engine of a motor vehicle or vessel, for mixed use (both transport and non-transport use) or if the end use was unknown when duty was paid
  • non-transport gaseous fuels supplied only for use in forklifts or for use other than in an internal combustion engine of a motor vehicle or vessel.