Federal Budget and Small Business
– EXPLAINED –
Last month the Federal Budget was announced and next month is the beginning of a new financial year. That must mean that this month it’s time to holiday right? Wrong! This month take the time to understand the new changes that will come into effect in July (and earlier!), and what it means for your business.
Below is a snapshot of the budget measures for small businesses:
- An immediate tax deduction for each individual assets costing less than $20,000 (up from $1,000!!). This rule can be applied to as many individual items as you wish and it has already started!
- Valid from 12 May 2015 to 30 June 2017.
- The Government is reducing the tax rate to 28.5% (down 1.5%) for the more than 90 per cent of incorporated businesses with annual turnover less than $2 million.
- The Government will also provide a 5 per cent tax discount to unincorporated businesses with annual turnover less than $2 million from 1 July 2015.
- The Fringe Benefits Tax (FBT) exemption list has been expanded to include work-related portable electronic devices.
- New tablet anyone?
- Small businesses will also benefit from Capital Gains Tax rollover relief when changing their legal structures but keeping the same owners.
- Employers who offer job seekers an ongoing job can receive a wage subsidy with flexible payment arrangements.
Treasurer Jo Hockey is spruiking the 2015-2015 budget as the “biggest small business package in Australia’s history”, helping small businesses to “invest, grow and create jobs”. The budget papers note that “96 per cent of all Australia’s businesses are small businesses, employing over 4½ million people and producing over $330 billion of our nation’s economic output per year”.
In 2013-14, Australians started over 280,000 small businesses, so it’s nice to see some assistance and appreciation!
To see small business tax relief examples for your industry and business structure visit the Budget: Jobs and Small Business page.