SMSF – ATO finalises its position in relation to event-based reporting
After detailed consultation with the self-managed super fund (SMSF) sector, the ATO announced today that its i
The government has simplified the car expense deductions for individuals from 1 July 2015.
Prior to 1 July 2015, there were four methods for claiming car expenses:
To simplify the 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 the existing 5,000km cap) and the 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 of Taxation will set the rate for future income years.
Employers should be aware that the Tax Office set the approved pay as you go 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 they lodge their 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.