2015 Budget: Business Tax Breaks

The 2015 budget has seen a new focus on increasing tax breaks for small business, with companies with annual turnover under $2,000,000 to receive a 1.5% tax cut, to 28.5%, while those earning more will continue to pay 30%.

Small businesses that are unincorporated, such as sole traders and partners in partnerships, will be able to reduce their tax liability related to small business profits by 5%, up to a maximum amount of $1,000.

Perhaps the biggest surprise for businesses is the immediate tax deductions for purchases which are under $20,000, rather than having to claim these purchases as deductions over several years. The new policy applies for businesses earning under $2,000,000 in annual turn over. The previous immediate tax write-off threshold was $1,000 per purchase.

The widely discussed introduction of the ‘Netflix tax’, has been proposed to take effect from 1st July, 2017, and will subject international businesses who provide digital services to Australians with the requirement to pay GST. The change will directly impact international corporations with global revenue of $1 billion or more, and have been designed to specifically target those who’ve made steps to avoid paying tax in Australia.

The information contained in this article is general by nature, and is not all-encompassing, nor does not take your personal circumstances into consideration. If you’d like to chat about the budget changes and how these impact your specific circumstances, please contact us, or give the team a call.

Progressive Wealth Solutions is a Corporate Authorised Representative No.472911 of Keystone Partnership Pty Ltd ABN 22 169 650 720, Australian Financial Services License (AFSL) No. 466137.

2015 Budget: Rebalancing Parental Support

As part of the 2015 budget, the government has announced multiple policy changes that will reduce benefits to some parents in an effort to encourage new mothers back into the workforce.

Parental Leave

The new policy, which is proposed to take effect on 1st July, 2016, will prevent parents from benefiting from claiming both the modest 18 week government parental leave offering and their employer’s parental leave scheme. The government scheme will be limited to $11,500, or where an employer scheme is payable, topping up by the government will only apply where the total payment due is less than $11,500.

Childcare Changes

The existing multiple benefits and rebates model (including the Child Care Benefit, and Child Care Rebate), are proposed to be combined into a single, means-tested subsidy, with additional payments accessible for disadvantaged and vulnerable children.

The simplified model, incentivises parents to work more hours, with those working 49 hours in a fortnight, receiving the full 100 hours of benefit (per fortnight), and families earning less than $65,000 a year receiving a benefit of up to 24 hours per fortnight of childcare.

Payment amounts have also been impacted, with those earning up to $65,000 receiving 85% back per child of the actual fee, or benchmark price (whichever is lower). This payment amount scales back as earnings are increased.

As with all government policy changes there are winners and losers, but the overall affect of this policy is to refocus the support to those working more hours.

The information contained in this article is general by nature, and is not all-encompassing, nor does not take your personal circumstances into consideration. If you’d like to chat about the budget changes and how these impact your specific circumstances, please contact us, or give the team a call.

Progressive Wealth Solutions is a Corporate Authorised Representative No.472911 of Keystone Partnership Pty Ltd ABN 22 169 650 720, Australian Financial Services License (AFSL) No. 466137.

2015 Budget: Pension access to become more difficult to access for self-funded retirees

This year’s budget included a range of changes across the board, leaving some better off, and some a little worse for wear. Perhaps one of the more pressing changes for retirees is the proposed changes to the pension asset test.

While not having an immediate impact (with much of the proposed change to take effect in 2017), many of those approaching retirement may be better off by structuring their investments in advance of the change.

The policy proposes to lift the asset test threshold, which will result in access to the full pension for more people, but an increase in the taper rate reduces the pension from $1.50 per $1,000 of assets above the threshold, to $3.00.

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Image source: Minister for Social Services.

These changes may result in a reduced entitlement for retirees who previously had access to a part-pension. This impact may be particularly challenging to overcome for those with assets which are not liquid (for example, property), and thus, those with questions should obtain specific advice relative to their situation on possible options.

The information contained in this article is general by nature, and is not all-encompassing, nor does not take your personal circumstances into consideration. If you’d like to chat about the budget changes and how these impact your specific circumstances, please contact us, or give the team a call.

Progressive Wealth Solutions is a Corporate Authorised Representative No.472911 of Keystone Partnership Pty Ltd ABN 22 169 650 720, Australian Financial Services License (AFSL) No. 466137.