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August 2014 NEWS LETTER

 Some important tax changes from 1st July

Medicare Levy

The medicare levy rises from 1.5% to 2%.

2% Deficit Levy

The new 'Deficit Levy' (tax on high income earners) applies to taxable income in excess of $180,000.

Tax rates for the 2014/2015 income year are as follows:


Taxable Income $ Tax Payable $
0- 18,200 Nil
18,201 - 37,000 Nil + 19% of excess over 18,200
37,001 - 80,000 $3,572 + 32.5% of excess over 37,000
80,001 - 180,000 $17,547 + 37% of excess over 80,000
180,001 + $54,547 + 47% of excess over 180,000

 The above rates do not include the Medicare levy of 2%.


The compulsory employer paid super contribution rises from 9.25% to 9.5%.

Superannuation contributions caps

The general concessional contributions cap rises from $25,000 to $30,000. For individuals aged 49 or over on 30 June 2014, the concessional contributions cap is $35,000.

The non-concessional cap is increased from $150,000 to $180,000. That means the 3-year bring forward rule increases from $450,000 to $540,000.

PAYG instalments threshold increases from 1 July 2014

The ATO has announced changes to the pay as you go (PAYG) instalments entry and exit thresholds.

From 1st July 2014, PAYG instalment thresholds have increased, which means that some taxpayers no longer need to pay instalments.

The entry and exit thresholds for:

  • business or investment income will increase from $2,000 to $4,000;
  • adjusted balance of assessment will increase from $500 to $1,000; and
  • notional tax will increase from $250 to $500.

There will no longer be a requirement for entities to register for GST to remain in the PAYG instalment system, if they have a zero instalment rate.

The ATO says that if taxpayers no longer meet the entry rules, they will be automatically exited from the PAYG instalments system. It will send a letter to notify tax agents of a client's automatic withdrawal.

If they want to continue to pay instalments towards their end of year tax liability, they can voluntarily re-enter the PAYG instalment sytem.

Superstream starting 1 July for many employers

Under 'Superstream', employers will need to be able to make super contributions on behalf of their employees by submitting data and payments electronically.

Equally, all superannuation funds, including SMSF's will need to be able to receive contributions electronically.

Employers with 20 or more employees

From 1st July 2014*, these employers should start using the Superstream standard to send contribution data and payments electronically.

Note(*): The ATO is being flexible on the start date, provided the employer is doing there best to implement Superstream, and has a firm plan to do so no later than 30 June 2015.

Employers with 19 or fewer employees

From 1st July 2015*, these employers will also be required to send contributions data and payments electronically. However, some may choose to implement Superstream sooner.

Note(*): The ATO is also being flexible on this start date, provided the employer has a firm plan to do so no later than 30 June 2016.


Employers have two options for meeting Superstream; either:

  • using software that conforms to Superstream; or
  • using a service provider that can meet Superstream on their behalf.

The ATO recommends that employers start investigating their options now, and has provided information and a list of providers on its website.

Now phone scammers target taxpayers with threats

Taxpayers are being warned to be on the lookout for a a malicious scam that attempts to intimidate them into paying a fake tax debt over the phone. "This scam is particularly concerning because it threatens taxpayers with legal action or arrest if they do not immediately hand over money, and their personal financial details over the phone," said ATO Chief Technology Officer, Todd Heather.

If people receive a call from the ATO and are concerned about providing their personal information over the phone, they should ask for the callers name and phone them back through the ATO's switchboard on 13 28 69.

Get a second (investment) opinion

The ATO is encouraging anyone unsure about a tax investment they have been offered to seek a second opinion from an independent and trusted tax professional, so as not to be fooled by legitimate-looking tax avoidance schemes.

Deputy Commissioner Tim Dyce says illegal schemes are usually designed to appear legitimate, even to experienced investors, but there are tell-tale signs you can look out for. In particular, he advises people to watch out for unusual financing arrangements such as round robin financing and non-recourse loans.

In one case, promoters offered a 'mortgage management plan' promising to assist investors in repaying their home loan sooner.

The scheme involved using the equity in their home to get addittional loans to claim investments deductions equivalent to home loan interest payments.

Be wary of promoters that:

  • offer zero-risk guarantees for their product;
  • refer you to a particular adviser or expert. They may seek to persuade you by claiming the adviser has specific knowledge about the arrangement and the promised tax benefits; and
  • ask you to maintain secrecy to protect the arrangement from rival firms and discourage you from obtaining independent advice.

Small Business online dispute resolution service

The Minister for Small Business has announced that small businesses in a dispute are set to benefit from the launch of Dispute Support, a new online dispute resolution information and referral tool.

"Small businesses have told us it can be difficult to find alternative dispute resolution services and to work out which one is most suited to their needs."

Dispute Support is a simple to use online tool to help small businesses identify the most appropriate low cost dispute resolution service for their dispute.

It also provides information on understanding and managing disputes, and tips to help avoid disputes in the future. It is available on the Australian Small Business Commissioner's website.











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