New ATO upfront deductions for motor Vehicles and Plant & Equipment

With the intention of driving more business investment during these difficult times, the Federal Government has announced new deductions for most plant and equipment, motor vehicle and other business assets either ordered or acquired from 1 July 2012 for eligible small businesses with a turnover of less than $2 million.

The new measures mean small businesses can instantly write off most assets (including Motor Vehicles) purchased after 1 July 2012 and costing less than $6,500 as a once off tax deduction.

Also available is an immediate one off deduction of $5,000 for new or used motor vehicles purchased from 1 July 2012 and costing more than $6,500 with the balance of the cost depreciated as per the normal depreciation rules.

Make sure you talk to us about this fantastic opportunity to generate a big tax break for your business for the 2013 tax year and beyond.

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New Private Health Insurance Means Test

Singles earning more than $129,001 and families earning more than $258,001 will lose access to their private health insurance rebate from the 2012-2013 financial year onwards, under a means test that recently secured passage through the House of Representatives and which will be effective on July 1, 2012.

The measures- which still have to pass the Senate, expected to be a formality- also mean the Medicare surcharge for the groups above will increase from 1% to 1.5% if they do not take out private health insurance.  That translates into $1,935 p/a for high earning singles and $3,870 pa for high earning families.

At present, almost anyone aged less than 65 years old, regardless of how much they earn, can get a 30% refund from the Federal Government for the cost of their private health insurance.  Those aged between 65 and 69 years old can receive a 35% refund and those aged over 70 years old can get 40% back.

The income test is based on the total sum of the taxable income, reportable fringe benefits, reportable super contributions and total net investment losses, less other taxed elements depending on a person’s age and circumstances.

Private Health Insurance Tiers for 2012-2013.

Tier Levy