Professor Robert Deutsch of the Tax Institute told My Business’ sister publication Accountants Daily that it is “going to be a big year in tax” ahead of next year’s federal election.
“We really do have a very clear choice in the next election certainly on tax,” he said.
“One party is going down the path of tax relief to try and work the economy and get re-elected, quite frankly; while the other party is choosing to maintain higher rates and change a lot of things like negative gearing, CGT discount, distributions out of trusts, thereby raising more revenue and being able to spend more on projects that the community needs.”
H&R Block’s Mark Chapman recently told My Business that as the political battle over tax ramps up, the “sensitive” issue of corporate tax cuts will almost certainly be dumped and that the $20,000 instant asset write-off for SMEs, while being dropped, is unlikely to revert back to its original $1,000 threshold.
However these are not the only changes to business-related taxes that he is anticipating the parliament debating post-budget.
The ATO has been flagging for months that it will launch a serious crackdown on work-related expenses, and Mr Chapman believes clothing claims will be top of the government’s hit list in this budget.
“What we did see last year in relation to some of the property expenses that people claim around depreciation and travel, we saw the government looking at very targeted areas where they thought that there were abuses and closing those down. They managed to do that, they got that through the parliament,” Mr Chapman said.
“So it wouldn’t surprise me if they tried something similar with some of the other expenses that the government regards as too high.
“[For example] the ATO has made a big issue particularly around some of the work-related clothing claims that people put in these days. It wouldn’t surprise me if they try to chip away at that in some way.”