Every year the government introduces new initiatives in the annual budget for small business. The second Tuesday of May each year kick starts planning for future spending and tax minimisation. But sometimes the confusion in the finer details may cause others to act too quickly.
I love the new budget initiatives and they are a step in the right direction, BUT do they apply to you? On surface the answer could be YES but what about the finer details? Like everything else in life, there are rules – lets check out the best of the business bunch – Stay with me!
Small Business Accelerated Depreciation
As a small business you’ll be able to immediately depreciate any eligible asset which costs less than $20,000 and purchased after 12 May 2015 at 7:30 pm. This is until 30 June 2017.
Sadly this only applies where the aggregated business turnover must be less than $2 million. Aggregated turnover means the total of turnover for all the businesses you are associated with – not just the one business. This write-off also applies to secondhand/used assets.
Take note, this is not a cashback initiative, this is a deduction which means a reduction against your income like any other expense. Best consider if the proposed asset purchase is worth your while especially if your business profitability is close to break-even as there is little or no tax saving to be made.
Think about what you business NEEDS to GROW first
Small Business Tax Rate Reduction
The tax rate for companies with an aggregates turnover (there is that term again) of less than $2 million will be reduced from 30% to 1.5% from 1 July 2015.
For individual taxpayers with business income from sole trader, partnership and trust business activity (of course with an aggregated turnover of less than $2 million), they receive a 5% tax discount.
Big Cheer for Start Ups
Start ups will be able to claim the full cost of professional expenses associated with starting a business from 1 July 2015. Normally these costs can be claimed over 5 years – a great change.
The government will also be introducing other measures to encourage business start-ups.
Capital Gains Relief
Say you are a trading as a seeking a better tax environment by changing the business structure to a company? Normally there is a capital gain on the transfer of the business to a company – BUT the government will waive the capital gain on transfer of the business as long as there are the same owners of the business.
Not sure how to proceed?
How about giving me a call on 1800 890 114 or getting in touch by email.
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