Budget night and it is pleasing to see the focus on assistance to small business. The big takeaway for small business is that the Government has put in place some sweeteners to encourage an increased investment from small businesses (i.e. businesses with an annual turnover of less than $2 million). These measures are aimed to have a flow on effect of stimulating economic growth and creating more jobs.
Here are the key points which are effecting small business:
- For small companies you will be receiving a 1.5% tax cut. The company tax rate remains at 30% however for small companies your tax rate will be 28.5%.
- For sole traders, you will receive a discount of 5% on the business income which is included on your individual tax return. This will be included as a tax rebate on your return.
- For any asset purchased between Budget night (12 May 2015) and 30 June 2017 which is less than $20,000 you will receive an immediate tax deduction. Great time to upgrade and purchase new equipment for your small business.
- Expanded Fringe Benefits Tax exemption for work-related portable electronic devices (i.e. mobile phones, tablets)
- Relief from Capital Gains Tax when you change your business from a sole trader to another legal structure.
- Start-ups will be able to immediately deduct professional expenses when you set up a business in the first year rather than writing them off over 5 years.
- A streamlined business registration process with a one page form required to be completed.
- Easier to use an employee share scheme to attract the talent which your business needs.
- Removing obstacles for access to crowd sourced equity funding for small businesses.
- Small businesses will have greater flexibility to wage subsidy arrangements to help with upfront costs of hiring and training staff.
We have included a copy of the Budget Paper – Growing Jobs & Small Business
We would suggest that you have a chat with your accountant and advisor on what the changes mean to your business. It is great to see that the Government has a focus on reducing the administrative burden on small business and we still believe small businesses who adopt cloud based software solutions will see a greater reduction in this administrative burden.
Small business is the lifeblood of our economy and there are some really positive steps in this budget to assist small business to achieve and grow.
We would love to hear what your feedback on how these measures will effect your business.
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