Small business and the budget
The Federal Government has given small business
$5 million of incentives in this year's budget.
The Government defines a small business as any business that has less than $2 million in revenue.
96 per cent of all Australia's businesses are small businesses. They employ over 4½ million people and produce over $330 billion of our nation's economic output per year.
The Government hope that the changes listed below will help small business pull the economy out of its current low spot.
Small Business Company Tax Cut
The company tax rate for small businesses will be reduced by 1.5 percent to 28.5 per cent from 1 July 2015.
Small Business Tax Cut
The Government will also provide a 5 per cent tax discount to unincorporated businesses with annual turnover of less than $2 million from 1 July 2015.
All small businesses will receive an immediate tax deduction for any individual assets they buy costing less than $20,000 (The old threshold was $1,000). This arrangement starts from last night and continues until 30 June 2017.
Cutting red tape - Fringe Benefits Tax (FBT)
The FBT exemption for work-related portable electronic devices will be extended to allow more than one device per employee.
Cutting red tape - Capital Gains Tax
Small businesses will also benefit from Capital Gains Tax rollover relief when changing their legal structures but keeping the same owners.
Immediate deduction for professional expenses on commencing a new business
From 1 July 2015, the government will allow businesses to claim an immediate write-off for a range of professional expenses associated with starting a new business, such as professional, legal and accounting advice.
Research and Development (R&D)
The government has introduced a cap of $100 million on the amount of eligible R&D expenditure for which companies can claim a tax offset at a concessional rate under the R&D tax incentive. Expenditure beyond the $100 million cap will receive a lower offset at the company tax rate.
These changes apply in relation to assessments for income years commencing on or after 1 July 2014.
This measure also includes provisions for the changes to be reviewed five years following Royal Assent and to sunset 10 years following the start date of 1 July 2014.
View or download the full overview by clicking here