As a boost for small businesses, the Government will extend access to a number of small business tax concessions by increasing the annual turnover eligibility threshold from $2m to $10m. These measures will apply from July 1, 2016, and they expand the number of small business entities able to access the concessions. From a tax planning perspective, some small business owners may look at the timing of their expenditure with the start date being July 1, 2016.
Under the announced measures, businesses with a turnover below $10m will now be able to access a range of existing small business tax concessions. The increase in the threshold will allow an additional 90,000 to 100,000 business entities access to concessions including:
- Lower company tax rates detailed in this newsletter
- Simplified depreciation rules, including the immediate tax deducti
on for assets costing less than $20,000 (up until 30 June 2017) - Simplified trading stock rules that give businesses the option to avoid an end of year stocktake if the value of their stock has changed by less than $5,000.
- A simplified method for PAYG installment payments
- The option to account for GST on a cash basis and apply the simplified method of GST installments payments
- Immediate deduction for prepaid expenses
- Immediate deduction for professional expenses
- Fringe Benefits Tax concessions, including exemptions for car parking and work-related portable electronic devices (applicable from 1 April 2017).
The current $2m turnover threshold will be retained for access to the small business CGT concessions.
