The recent expansion of the definition of a small business for tax purposes creates significant tax and commercial opportunities. The small business tax offset for companies is just one of a package of accessible incentives. Your should plan to take advantage of these opportunities now, to grow in both the medium and long term.
You may be a small business now, even if you weren’t in the recent past. The definition has been expanded. Businesses turning over $10 million can access a variety of income tax concessions, such as the small business tax offset, as well as simplified means of accounting. Previously the definition had been restricted to businesses turning over less than $2 million.
- For incorporated businesses (e.g. a company) the income tax rate has been reduced to 27.5% effective from the 2016-17 financial year.
- For a sole trader a small business tax offset is available of $1,000 per year.
- depreciation rules have been simplified and accelerated so that your business can save tax on newly acquired plant material and equipment.
- An immediate tax deduction is available for plant and equipment for your business worth less than $20,000. This is open to you until 30 June 2018, so planning fixed asset and growth requirements is essential immediately.
