BIG tax breaks for Small Businesses
Some great news, - there is an increase to the aggregated turnover threshold to $10 million for access to small business tax concessions from 2016-17. This means that any businesses with an aggregated turnover of under $10 million can now access a raft of concessions previously only accessible to those small businesses with turnover of less than $2 million. (However, not all small business concessions will be available - the main concession not available is the access to the small business CGT concessions, which still requires the entity to pass a $2 million turnover test or a $6m net asset value test.)
There are progressive reductions in the corporate tax rate for businesses with a turnover under $50 million. Businesses with an aggregated turnover of less than $10 million will benefit from a company tax reduction to 27.5% this financial year.
For unincorporated businesses such as sole traders, partnerships and trusts there is an increase to the aggregated turnover threshold to $5 million (up from $2 million) for access to the small business income tax offset from 2016-17, and an increase to the unincorporated small business tax discount to 8%(up from 5%) from 2016-17. The offset itself will be capped at $1,000.
Potentially the most valuable concession is the extension (to June 2018) of the immediate tax write off for assets costing less than $20,000 for those businesses with less than $10 million turnover.
Dereen Wallace, Partner, MBA Business Solutions