I often come across businesses that are too busy to keep informed of the latest updates and bulletins from the Australian Tax Office. Not keeping up to date and informed on these issues can have a major impact on your business.
If you are a business owner, I suggest that you make regular visits to the ATO website, www.ato.gov.au/backtobusiness to ensure that you are up to date with the latest announcements and legislation changes from the ATO.
Below I outline 3 recent important updates on the ATO website that you may have missed.
1. What can I claim as a small business?
Changes to the simplified depreciation rules that apply from the 2012-13 income year are:
A: Increase to instant asset write-off threshold
You can now claim (write off) an outright deduction for most depreciating assets purchased that cost less than $6,500 each. This has increased from $1,000.
Example: Annette buys a $5,900 camera and a $4,500 high resolution printer for her photography business. Both the camera and the printer are depreciating assets used entirely for business. As each cost less than $6,500, she can claim as a deduction $5,900 for the camera and $4,500 for the printer in the 2012-13 income year.
B: Accelerated deduction for motor vehicles
From 2012-13, if you buy a motor vehicle for use in your business, you can claim an immediate $5,000 deduction. The remainder of the cost is deducted through the general small business pool at 15% for the first year and 30% for later years.
Example: In the 2012-13 income year, Louie bought a $37,080 ute which was used 50% for business purposes. Louie calculates his depreciation deduction for the 2012-13 income year this way:
$5,000 plus, 15% x ((50% x $37,080) – $5,000) = $7,031
C: Simplified pooling
From 2012-13, most depreciating assets that cost $6,500 or more (regardless of their effective life) can all be ‘pooled’ under the simplified depreciation rules and deducted at a single rate of 30%. The exception is newly acquired assets (like Louie’s ute) which are deducted at 15% (half the pool rate) for the first year. If you had a long life pool (which no longer exists), its closing balance is rolled over to form part of the opening balance of the general pool for the 2012-13 income year (to be depreciated at a rate of 30% instead of 5%).
2. Tax Invoice Documentation you must have
A tax invoice is a document generally issued by the seller. It shows the price of a sale, indicating whether it includes GST, and may show the amount of GST. You must have a tax invoice before you can claim a GST credit on your BAS for purchases of more than $82.50 (including GST).
3. Changes to the Super Guarantee Rate 2013-2014
To help grow Australian workers’ savings for retirement, the compulsory super guarantee rate will gradually increase from 9% to 12%. When you make super payments on behalf of your employees based on the minimum 9% super guarantee rate, you will need to increase this rate on which you base your calculations to 9.25% on 1 July 2013. The super guarantee rate increases to 12% over seven years, as shown in the table below:
| Year | Rate |
| Current rate | 9.00% |
| 1 July 2013 | 9.25% |
| 1 July 2014 | 9.50% |
| 1 July 2015 | 10.00% |
| 1 July 2016 | 10.50% |
| 1 July 2017 | 11.00% |
| 1 July 2018 | 11.50% |
| 1 July 2019 and onwards | 12.00% |
What you need to do:
- Update your payroll and accounting systems to apply the appropriate increase to the super guarantee rate.
- From 1 July 2013, increase the rate you use to work out the super guarantee payments you make for your employees, from 9% to 9.25%.
- Continue to increase the rate you use to work out the super guarantee payments you make for your employees each year until 1 July 2019.
- If you have 19 or fewer employees, consider using the Small Business Superannuation Clearing House
- For clients using Arrow, you can change your Superannuation Guarantee Charge Rate from 9.00% to 9.25% as at 1st July 2013 by selecting the appropriate Payment Type in the “Maintain Payment Types” screen in Payroll and modifying the highlighted percentage field as in the screenshot below.
