Small business tax changes 2015

August 7th, 2015 | Posted in Tax and Small Business

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On 12th May Treasurer Joe Hockey released the new federal budget.

Small business owners, that is, businesses that have an annual turnover of less then $2 million, have been the main winners.

The main small business tax changes have been summarised below:

  • Small businesses will benefit from a reduced company tax rate from 30 per cent to 28.5 per cent, and for other entities, i.e trusts, sole traders, partnerships, will be entitled to a 5% small business tax discount, capped at $1,000.
  • Small business tax payers who acquire assets up to $20,000 are entitled to an immediate write off, this can potentially save a company $6,000 in that immediate year, rather then the traditional method of depreciation over the life of the asset.
  • Car Expense deductions from 1st July 2015 will only allow two methods to be used – the log book method or the cents per Km method (reduced to 66c per kilometer regardless of engine size). The 12% of original car value and 1/3 of actual costs will be scrapped.
  • From 1st April 2016 businesses are allowed to provide one more portable electronic device without attracting an FBT charge, for example a laptop and a tablet can be FBT exempt at the one time, were currently it would have been only one device exempt.
  • No CGT will apply on a company that will like to change its company structure from one structure to another, for example if an individual wants to change over to a trust no CGT applies, from 1st July 2016, prior it was only applied to individual, partnership or trust to company.

If you would like further information on the tax changes affecting small business particularly your business, please contact Bookaid Bookkeeping for a no obligation chat.

This article was written by Nadia Elmoustafa – Director of Bookaid Bookkeeping. Nadia is an Accountant and Bookkeeping expert and specializes in helping her clients find more efficient and effective ways of maximizing their profits.