Definition of Small Business now up-to-10 million in turnover, instant asset write-off still there for another 12 months.
The government’s hard-fought change to the corporate tax rate for small businesses has also altered the definition of “small business” to now include companies with up to $10 million in annual turnover, meaning budget pledges to extend a number of tax concessions to more Australian companies will be realised.
When it unveiled its Ten Year Enterprise Tax Plan in the 2016 federal budget, the government promised to “put small business first” by extending the turnover threshold for a number of tax benefits previously on offer for companies with up to $2 million in annual turnover.
These include access to the immediate asset write-off scheme when investing in items worth up to $20,000, simplified rules around stock takes, the option of accounting for GST on a cash basis, and the opportunity to take up more simplified PAYG processes.
While the changes do not change eligibility for capital gains tax concessions for small businesses, which currently apply to those with a turnover of $2 million or less, they were projected at the time of last year’s budget to extend benefits to 90,000 more Australian businesses.
Small businesses are the engine room of our economy. The changes will mean businesses of up to $10 million in turnover will be able to immediately start claiming the concessions; the government’s tax bill that has recently passed on Friday essentially shifted the definition of small businesses to those with up to $10 million in annual turnover.
The tax rate for eligible companies has reduced from 30% to now 27.5% from 01/07/2016 and if you operate your business through an entity other than a company the threshold for 8% tax discount (up to $1,000) is for businesses turning over up to $5 million.
Businesses can buy office equipment, install fitouts, new tables, chairs, photocopiers, and 3D printers [through that write-off] … The notion of going out and replacing old equipment with the new has become a lot more attractive. It’s a really good example of how things should work.
The Budget handed down on 09/05/2017 has indicated the $20,000 instant asset write-offs are for companies turning over up to $10 million and now runs until 30th June 2018.
Please contact Tim Wilshire (firstname.lastname@example.org; (07) 3267 2111