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Posts Tagged Small Bussiness


Bringing forward small business tax cuts by five years

12th Nov, 2018

The Prime Minister has announced that the Government will bring forward its planned tax cuts for small business by five years. The Labor Party has also indicated it supports bringing forward the tax cuts.

This means businesses with a turnover below $50 million will pay a tax rate of 25% in 2021–2022, rather than from 2026–2027 as currently legislated.

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12-month extension of $20,000 instant asset write-off

12th Oct, 2018

The Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 has now passed through Parliament without amendment.

The Bill makes changes to the tax law to extend by 12 months the period during which small businesses can access expanded accelerated depreciation rules for assets that cost less than $20,000. The threshold amount was due to revert to $1,000 on 1 July 2018, but will now remain at $20,000 until 30 June 2019.

Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed the extension, but reminded small businesses and family enterprises that the instant asset write-off is a tax deduction, not a rebate – your small business needs to make a profit to be eligible to claim the benefit.

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Call to boost instant asset write-off to $100,000

12th Sep, 2018

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has called for the $20,000 instant asset write-off for small businesses to be embedded in legislation and extended up to $100,000 every three years. Ms Carnell said increasing the instant asset write-off to $100,000 every three years would enable small businesses with higher costs for key equipment to participate.

These recommendations stem from the Ombudsman’s November 2017 paper, Barriers to investment: a study into factors impacting small to medium enterprise investment.

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Small businesses

05th Sep, 2017

Asset write-offs

Small businesses with a turnover of less than $10 million can get an immediate deduction for assets that cost up to $20,000 each in their 2016–2017 return. The $20,000 threshold now applies until 30 June 2018.

Assets that cost $20,000 or more can’t be immediately deducted. They need to be deducted over time using a small business asset pool.

TIP: It’s important to apply all of the simplified depreciation rules correctly so your business doesn’t under-claim for its eligible assets. Talk to us today for more information.

Tax debts: setting up a payment plan

Does your small business have a tax debt? The ATO encourages you to get in touch to set up a payment plan. If the debt is $100,000 or less, you can use the ATO’s self-help service to easily arrange paying by instalments.

If a business pays its tax debt late or by instalments, interest accrues on the unpaid debt. However, some businesses with activity statement debts may be eligible for interest-free payment plans.

To deal with a business tax debt of more than $100,000, you can phone the ATO on 13 11 42.

TIP: Your business still needs to lodge all of its ongoing activity statements and tax returns on time, even if you have a payment plan or can’t pay by the due date.

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Small business tax breaks in the pipeline

09th Oct, 2016

A Bill has been introduced in Parliament which proposes to:

  • increase the small business entity turnover to $10 million from 1 July 2016;
  • increase the unincorporated small business tax discount from 5% to 16% over a 10-year period;
  • increase the turnover threshold to qualify for the lower company tax rate; and
  • lower the company tax rate on a schedule over 11 income years, reaching a unified company tax rate of 25% in the 2026–2027 income year.

Small business entities with aggregated turnover of less than $10 million would be able to access a number of small business tax concessions, including, among others, immediate deductibility of small business start-up expenses, simpler depreciation rules and simplified trading stock rules.

TIPS: The $2 million threshold for the purposes of the small business capital gains tax concessions will be retained.

The tax discount for unincorporated small businesses – introduced in the 2015–2016 income year – entitles individuals who are small business entities, or who are liable to pay income tax on a share of the income of a small business entity, to a tax offset equal to 5% of their basic income tax liability that relates to their total net small business income. This offset is capped at $1,000. Although the proposed increases in the offset would increase the amount of offset an eligible individual may claim, the offset would remain capped at $1,000.

TIPS: With a difficult Senate, the Coalition Government may make further changes in order to pass its Bill.

Please contact our office for further information.

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ATO small business benchmarks updated

09th Aug, 2016

The ATO has announced the latest benchmarks for small businesses. Based on the data from 2014 income tax returns and business activity statements, the benchmarks cover over 1.3 million small businesses.

ATO Assistant Commissioner Matthew Bambrick said one of the great things about the benchmarks was that they gave a lot of small-business owners peace of mind.

“If a small business is inside the benchmark range for their industry and the ATO hasn’t received any extra information that may cause concern, they can be confident that they probably won’t hear from us”, Mr Bambrick said.

Mr Bambrick said some small businesses outside the benchmark range may simply be incorrectly registered, or the business intent may have changed since starting up. “These types of small administrative errors can be easily fixed by checking the previous year’s tax return to see which business industry code was used and then updating it in the next return and on the Australian Business Register”, Mr Bambrick said.

TIPS: Business owners can use the benchmarks to compare their businesses with other similar businesses. They can also be used by the ATO to identify businesses that may not be meeting their tax obligations.

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