By Justin Inskip Director, Westlawn Business Services
26 April 2016

In our April tax roundup for individuals, we include updates on car expense deduction rules, superannuation rates and thresholds for 2016-17, ATO data matching programs and more.

Car expense substantiation methods simplified

To simplify the car expense deduction rules, from 1 July 2015, the government has abolished the one-third of actual expenses method and 12% of original value method. The cents per kilometre method (with existing 5,000km cap) and logbook method (with unlimited kms) remain.

The cents per kilometre method has been simplified to use a standard rate of 66 cents per kilometre for the 2015-16 income year, rather than a rate based on the engine size of the car. The Commissioner will set the rate for future income years.

The ATO has advised employers to be aware that the ATO set the approved PAYG withholding rate for cents per kilometre car allowances at 66 cents per kilometre from 1 July 2015. Employers should withhold from any amount above 66 cents for all future payments of a car allowance. Failure to do so may result in the employee having a tax liability when he or she lodges a tax return.

Employees who from 1 July 2015 have been paid a car allowance at a rate higher than the new approved amount should consider whether they need to increase their withholding to avoid any tax liability at the end of the year.

Superannuation rates and thresholds for 2016-17

The ATO has released the key superannuation rates and thresholds for 2016-17. The rates apply to contributions and benefits, employment termination payments, super guarantee and co-contributions and include the following:

i)              Concessional contributions cap

The general concessional contributions cap is $30,000 for those aged under 49 years old. A higher cap of $35,000 applies to those aged 49 years or over on 30 June 2015.

ii)             Non-concessional contributions cap

The non-concessional contributions cap is $180,000. People aged under 65 years may be able to make non-concessional contributions of up to 3 times their non-concessional contributions cap for the year, over a 3-year period. This is known as the “bring-forward” option.

iii)            Maximum superannuation contribution base

The maximum super contribution base for 2016-17 is $51,620 per quarter.

iv)           Superannuation co-contributions

If you are an eligible low or middle income earner and make personal (after-tax) contributions to your super during a financial year, the government will match your contribution with a co-contribution up to a certain amount. The maximum super co-contribution entitlement for the 2016-17 year remains at $500. However, the lower income threshold increases to $36,021 and the higher income threshold increases to $51,021.

Lost and unclaimed super

In the 2015-16 Federal Budget, the government announced it will implement a package of measures to reduce red tape for superannuation funds and individuals by:

  • Removing redundant reporting obligations; and
  • Streamlining lost and unclaimed superannuation administrative arrangements.

The changes are intended to make it easier for individuals to be reunited with their lost and unclaimed super. For a detailed description of the proposed changes, visit the ATO website.

Paper activity statements to stop for myGov users and electronic lodgers

Individual and sole trader taxpayers who have myGov accounts linked to the ATO will no longer receive paper activity statements or instalment notices.

If you previously received paper statements, all your activity statements or instalment notices will now be delivered electronically.

When an activity statement or instalment notice is ready, the ATO will send a message to your myGov Inbox. To lodge or pay, click the link in the message to go to the ATO’s online services for individuals and sole traders.

However, before proceeding to lodge, ask your accountant for assistance with this lodgement obligation.

Data matching programs

The ATO is undertaking a number of data matching programs that may impact you as an individual taxpayer depending on what sort of activities you’ve been engaged in. Should you have any concerns about these data matching programs or have received correspondence from the ATO about any of them, contact your Westlawn Business Services Accountant.

For more information about data matching on real property transactions and insurance asset classes refer to our March 2016 tax roundup.

For more information about online selling data matching program refer to our June 2015 tax roundup.

Contact Westlawn Business Services

  • Call us on 02 6642 0444, or
  • Email us at wbs@westlawn.com.au

Copyright © 2016

Disclaimer
Westlawn Business Services Pty Ltd provides this information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation.