Company & Business Tax Rates Cut
Kasker Associates, Gordon Taxation & Business Solutions
Bookkeeping, Accountant, Business
A range of measures for small businesses were included in the 2015-16 Federal Budget. These are listed below:
• Company tax rate cut - The tax rate for companies with an aggregated annual turnover of less than $2 million will be reduced by 1.5% to (ie from 30% to 28.5%) from the 2015-16 income year.
• Tax rate cut for other business entities - A 5% tax discount for individual taxpayers with business income from an unincorporated business with an aggregated annual turnover of less than $2 million will also be introduced from the 2015-16 income year.
• Increase to the instant asset write-off threshold to $20,000 - The threshold below which small businesses can claim an immediate deduction for the cost of assets will be temporarily increased from $1,000 to $20,000. This applies to assets purchased from Budget night onwards.
• Small business simplified depreciation pool – Assets costing more than $20,000 will be able to be put in the small business simplified depreciation pool. If the pool balance falls below $20,000, it will be able to be written off immediately. The rules preventing small businesses from re-entering the simplified depreciation regime for five years after opting not to use it will also be temporarily suspended. This applies from Budget night onwards.
• Professional expenses – new businesses will be able to claim an immediate deduction for professional expenses (eg for the cost of advice from lawyers, accountants and other professionals) associated with starting a business from the 2015-16 income year.
• Employee share schemes - Further changes will be made to the taxation of employee share schemes. There is already a Bill in Parliament making changes to the rules; the Budget changes are in addition to the ones already coming.
• New CGT relief - Capital gains tax relief will be available to small businesses for a CGT liability arising from the alteration of their legal structure from the 2016-17 income year.
• Electronic devices and FBT - The fringe benefits tax exemption for portable electronic devices used primarily for work purposes will be expanded from 1 April 2016.
• Preparing for drought - Primary producers will be able to claim accelerated depreciation for water facilities, fodder storage and fencing from 1 July 2016.
There is no legislation for these measures yet. However, the ATO has already issued some guidance in relation to the increased instant asset write-off threshold amount and some of the other changes. Visit the ATO website for guidance.
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