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The Government announced the current statutory formula 4-percentage rate scale method for valuing car fringe benefits will be replaced with a single statutory rate of 20%, regardless of the number of kilometres travelled.
The current scales, ranging from 7% to 26%, will be phased out over the next 4 years starting from 7.30 (AEST) on 10 May 2011.
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Distance travelled during FBT year
(1 April - 31 March)
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Existing %
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New contracts from
10 May 2011 %
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New contracts from
1 April 2012 %
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New contracts from
1 April 2013 %
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0 - 15,000km
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26
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20
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20
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20
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15,001 - 24,999km
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20
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20
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20
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20
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25,000 - 40,000km
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11
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14
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17
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20
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More than 40,000km
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7
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10
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13
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17
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As announced in the 2010/11 Budget the Government will significantly enhance and expand the existing capital allowance (depreciation) concessions available to small businesses from 1 July 2012. The threshold under which depreciable assets of small businesses can be immediately written-off will be increased from $1,000 to $5,000.
Small businesses that elect to pool their assets will also be able to depreciate other assets (apart from buildings) in one pool at a rate of 30 per cent. This single pool will replace the two pools under the existing law.
In addition to the previously announced changes from 1 July 2012, Australian small businesses are able to claim an instant tax write-off of the first $5,000 of any motor vehicle purchased. For example, a tradesman on a 30% marginal tax rate, buying a new $33,960 ute would receive an extra tax benefit of $1,275 in the year they purchased the vehicle. The remainder of the purchase value can be transferred into the general small business depreciation pool, which is depreciated at 15% in the first year and 30% in later years.
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