Budget Announcements- Small Business
Posted by Darren May 13, 2016
We are all aware of how hard it is to work and drive a small business these days. With a reduced confidence in economy and constant negative reporting in the media, small business appears to be harder than ever. Following the budget announcement last week by the government, it appears that they have recognised this and moved to make changes.
The most advertised change in the budget has been the decrease in the company tax rate. This has dropped to 27.5% for companies that turnover $10m effective from 1st July 2016. The level of turnover to receive this reduced tax rate increases each year until 2022/23 when companies turning over $1b will be able to receive the discounted tax rate. The tax rate will then decrease steadily over the next 3 years so that in 2026/27 the tax rate will be 25%. While this may not be a big adjustment for some people, this would assist with those who are now restricted by the proposed changes super contributions.
On the back of this, the small business threshold has increased to $10m, up from $2m. This has opened up opportunities for a large number of companies across Australia to take advantage of the small business concessions that are on offer. For example, the simplified depreciation rules as per the last budget that allowed for the immediate deduction for any asset purchased up to $20,000 has been extended to the 30th June 2017. Under this cap, companies will have the option of accounting for GST on a cash basis, and the ability to operated under simplified trading stock rules.
Whilst there are only a few changes for small business, they can have a greater impact for small business owners.
The best way to understand how these changes affect your business is to make an appointment with one of our experienced senior accountants on 4655 9247.
The above information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Wards Accounting Group Pty Ltd (ACN 105 280 831) ABN 32 105 280 831 is a Corporate Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361