The Good News

Small business concessions: changes to simpler depreciation rules apply from 2012-13

From 2012-13:

• the small business instant asset write-off threshold has been increased from $1,000 to $6,500
• the long-life small business pool and the general small business pool have been consolidated into a single pool to be written off at one rate
• small businesses can claim an accelerated initial deduction for motor vehicles acquired in 2012-13 and subsequent years.

These amendments only apply to small businesses that have an aggregated turnover of less than $2 million. Aggregated turnover includes the annual turnover of the small business and the annual turnovers of any connected or affiliated businesses.

The Bad News

Small business concessions: removal of the entrepreneur’s tax offset from 2012-13

From 2012-13, the entrepreneur’s tax offset can no longer be claimed.

The entrepreneur’s tax offset may still be applied to assessments for applicable income years up to and including 2011-12.

Private health insurance and Medicare levy surcharge change

The government has introduced changes to the private health insurance rebate and the Medicare levy surcharge. From 1 July 2012, the private health insurance rebate and the Medicare levy surcharge will be income tested against three new income tier thresholds.

Higher income earners will receive less private health insurance rebate or, if they do not have the appropriate level of private patient hospital cover, the Medicare levy surcharge may increase.

The ATO will determine the amount of your private health insurance rebate entitlement when you lodge your income tax return. This may result in a refund or a liability for you.