The Federal Budget, brought down on 12 May is complex and will be well known to most business people.
However, we want to highlight two largely unknown changes.
Personal motor vehicle use in the workplace
From 1 July 2015 there will only be one method for owners to claim motor vehicle expenses for work related use. The maximum 77c per kilometer for large vehicles and 65c for small vehicles will be abolished and replaced with a flat rate of 66c per kilometer. Owners of hybrid and electrically powered vehicles will also now be entitled to the 66c per kilometer reimbursement.
For employees who use private motor vehicles extensively, and claim over $5,000 per annum for motor vehicle usage at work will still need to complete Log Books.
The 12% of original value method and the 33% of actual expenses methods will be abolished.
Responsibility for reviewing the rate will move from Treasury to the Commissioner for Taxation and will be reviewed annually.
Leasing and salary sacrificing of motor vehicles will be unaffected.
Salary packaging and FBT
The Australian Institute of Company Director’s Budget Summary reports that:
New FBT rules will impact salary-packaging in this sector from 1 April 2016.
Meal entertainment benefits – which include holidays, cruises and weddings – for employees will be capped at $5,000.
Amounts exceeding the cap will also be counted towards whether an employee exceeds their existing FBT exemption or rebate cap.
All meal entertainment benefits will become reportable.
This measure will save the Government $295 million.