ATO’S new motor vehicle rates
2 August 2018
NEW MOTOR VEHICLE RATES FROM 1 JULY 2018
Cents per kilometre rate
The Australian Taxation Office has advised that the cents per kilometre rate has been increased to 68 cents per kilometre from the 1 July 2018.
The cents per kilometre rate is applicable for businesses paying their employees a motor vehicle allowance based on the number of kilometres they travel. For example, if an employee travelled 250 kilometres, the new allowance payable to them is $170 compared to $165 as was the case before the 30 June 2018.
It is additionally good news for individuals when preparing their 2019 tax return. As a bit of a recap, under the cents per kilometre method a deduction can be claimed for the number of kilometres travelled during a year up to a maximum of 5,000 kilometres. Written evidence is not required to be kept, however the Australian Taxation Office has voiced concerns over the last few months about more questions being asked if 5,000 kilometres are being travelled each year without any real grounds for the deduction. For example, claiming the travel between home and work is not allowed.
GST claimable on Motor Vehicles
From the 1 July 2018, the Australian Taxation Office has increased the car limit to $57,581.00.
Cars with a purchase price higher than the car limit are only able to claim GST on 1/11 of the car limit. For example, if a business purchases a vehicle costing $75,000 on the 15 July 2018, the maximum GST credit they can show on the next business activity statement is $5,234.
If you would like assistance with recording the correct GST on the acquisition of a motor vehicle, please contact PJT – we are awesome!
Latest News
Big changes are on the way for aged care, with new rules starting from 1 November 2025. While these changes aim to create a more sustainable and fairer system, they do bring added complexity — especially when it comes to understanding the fees and making the right financial decisions. Here are the five key things you need to know: 1. Aged care will cost more - but is still subsidised If you or a loved one is moving into residential aged care from 1 November 2025, the amount you’ll need to contribute will be higher. That said, the Government will continue to fund a large share of care costs - around 73% on average. But it will be important to consider your cashflow. 2. Expect new terminology and fee calculations The language is changing. Instead of the current “means-tested care fee,” you’ll now see new names like Hotelling Contribution and Non-Clinical Care Contribution. How much you are asked to pay will still be based on your income and assets, but new formulae may result in higher contributions than under the current rules. 3. Lifetime caps remain – but at a higher level A lifetime cap will continue to apply to limit how much you can be asked to pay as a non-clinical care contribution over your total stay in residential care. This cap is increasing to $130,000, but with a new safeguard, that no matter how much you pay, you will only need to pay this fee for a maximum of four years. This helps ensure fairness between residents with different levels of wealth. 4. Retention amounts are being reintroduced If you choose to pay a lump sum for your room (known as a refundable accommodation deposit - RAD), aged care providers will deduct a “retention amount” of up to 2% per year (capped at 10% over five years). While this increases the cost slightly, it may still be better value than paying the daily accommodation payment. 5. Good advice can prevent costly mistakes Navigating these new rules can be confusing - especially when you need to make major decisions about the family home, assets or pension entitlements. The cost of getting good advice is often small compared to the cost of getting it wrong. That’s why seeking qualified aged care financial advice is more important than ever. If you're starting to think about aged care for yourself or a family member, now is the time to start planning and seek advice. As specialists in aged care advice, we can help you to make informed decisions with confidence and peace of mind. Please contact Lynde via the link below to chat more about these changes.
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