Budget 2015: Individuals
Tax changes to work related car expenses
Date of effect: From 2015/2016 income year
The way work related deductions for car expenses are calculated will change.
The ‘12% of original value method’ and the ‘one‑third of actual expenses method’ will be removed – the Government says they are only used by less than 2% of those who claim work related car expenses.
The ‘cents per kilometre method’ will be modernised by replacing the three current rates based on engine size with one rate set at 66 cents per kilometre to apply for all motor vehicles, with the Tax Commissioner responsible for updating the rate in following years. The ‘logbook method’ of calculating expenses will be retained. These changes will not affect leasing and salary sacrifice arrangements.
Zone Tax Offset excludes fly in fly out and drive in drive out workers
Date of effect: 1 July 2015
‘Fly in fly out’ and ‘drive in drive out’ (FIFO) workers will be excluded from the Zone Tax Offset (ZTO) where their normal residence is not within a ‘zone’. This means that some individuals who currently qualify for the offset will miss out from the 2016 income year onwards if they do not actually live full-time in a zone.
The ZTO is a concessional tax offset available to individuals in recognition of the isolation, uncongenial climate and high cost of living associated with living in identified locations. Eligibility is based on defined geographic zones.
Currently, to be eligible for the ZTO, a taxpayer must reside or work in a specified remote area for more than 183 days in an income year. The Government estimated that around 20% of all claimants do not actually live full-time in the zones. Many of these are FIFO workers who do not face the same challenges of remote living that the ZTO was designed to address.
For those FIFO workers whose normal residence is in one zone, but who work in a different zone, they will retain the ZTO entitlement associated with their normal place of residence.
SOURCE: Knowledge Shop
To discuss how this may impact your circumstances please contact PPT on (03) 5331 3711.
DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
