Small businesses have a range of tax concessions available to them, do you know what you’re entitled to claim?
So what is deemed to be a small business? A sole trader, partnership, company or trust that operates a business and has aggregated turnover of less than $2 million. Aggregated turnover is comprised of your primary business turnover plus the turnover of any other business you control.
On to what you can claim.
1.Instant Asset Write-off You can immediately deduct most business assets costing less than $20,000, purchased between 7.30pm on 12 May 2015 and 30 June 2017.
2. Deductions for Professional expenses Beginning this tax year, 1 July 2015, a range of start up costs including professional, legal and accounting advice as well as government fees and charges are deductible. For example ; George is setting up a swimwear shop and gets advice from a consultant to find a suitable location. The cost of obtaining this advice is fully tax deductible in the year it occurs.
3. Restructure/Rollover From 1 July 2016, the legal structure of a business can be changed without incurring any income tax liability when active assets are transferred by one entity to another. This applies to CGT assets, trading stock, revenue assets and depreciating assets.
4. FBT Changes for work-related devices From 1 April 2016, small businesses won’t incur an FBT liability when providing employees multiple work-related devices, including laptops, tablets, calculators, GPS and mobile phones even if they have similar functions. It also includes computer software, briefcases, tools of trade and protective clothing. This benefit may be part of or in addition to the employee salary or wages package.
5. Income Tax Offset This measure is now law. Individual taxpayers with business income under 2M are eligible for a small business tax discount, delivered as a tax offset and capped at $1,000 per individual, per year.
6. Company tax cut From 1 July 2015, the tax rate for small businesses has been reduced from 30% to 28.5%. The maximum franking credit is unchanged at 30%, even if the small business is eligible for the 28.5% tax rate.
For more information and further concessions, the ATO’s link is here; https://www.ato.gov.au/Business/Small-business-entity-concessions/Whats-new-for-small-business-/