Federal budget changes that may affect your business

Part of the reason why our government had to raise taxes and cut back on spending is because they overestimated the revenue they would receive from business taxes.

For example, the mining tax which started on 1 July 2012 will now only raise $3.3 billion in the first four years rather than the expected $13.4 billion.

Another example is government revenue from a carbon price (called a price but is really a tax) had to be reduced because they now predict a carbon price of $12 a tonne compared to the original forecast of $29 a tonne when Australia links its emissions trading scheme with the European Union (EU). Currently the price of an EU carbon permit is around $5 a tonne so this revenue may be reduced again in future.

Well then it is not surprising that the government's proposal to reduce the company tax rate from 30% down to possibly 28% is no longer happening.

However the company loss carry-back is still in effect for the current financial year. If you run your business through a company and it makes a loss in the 2013 financial year, you can use it to offset the tax paid for the 2012 financial year. Going forward your company can carry back up to $1 million of tax losses each year which helps smooth out the tax bills when you have one really good year followed by a really bad year. Also note that this only applies to companies so trusts and sole traders cannot carry back losses.

Now for the few of you who import, the government is increasing the Import Processing Charge (IPC) from 1 January 2014.

• For consignments valued over $10,000, the IPC for electronic sea import declarations will be increased by $102.60 to $152.60 per consignment and the IPC for electronic air import declarations will be increased by $81.90 to $122.10 per consignment. 
• For consignments valued over $1,000 and up to $10,000 the IPC will remain the same.
• The  IPC  is  still not  applied  to  consignments valued at $1,000 or less. This is also good news for everyone who buys things online from overseas as no GST is charged on total packages less than $1,000 either. Well you tell me where I can buy a Game of Thrones cup locally in Adelaide...