The 2015 Federal budget has been released and has quite a few measures for small business that you can capitalise on to reduce your tax and improve your cash flow.
The highlights for small businesses are:
Accelerated depreciation changes
From 12 May 2015 to 30 June 2017, if your business’s annual turnover is less than 2 million, you can now immediately write off any business expense up to $20,000. Assets costing more than $20,000 can be placed into a small business simplified deprecation pool where they will depreciate at 15% in the first year and 30% in each following year until the balance is less than $20,000 at which time it can also be immediately deducted. This rule will revert back from 1 July 2017.
Small business tax discount
Individual taxpayers with small business income from an incorporated business, such as a sole trader, trust or partnership will get a 5% discount as a tax offset, up to $1,000 per individual for each income year. This measure will apply from the 2015/16 financial year. The tax rate for companies with a turnover less than $2m has also been reduced by 1.5% to 28.5%.
Immediate deduction for business establishment costs
Setting up your small business has become easier as you can immediately deduct expenses associated with starting a new business include, professional, legal and accounting advice to establish a company, trust or partnership. Previously these costs could only be written off over a five year period.The deduction will be available from 2015/2016 financial year.
CGT relief reforms for small business structure
As your business grows you many need to change the legal structure of the business. From the 2016/17 financial year these changes will no longer attract capital gains tax for the small business.
GST on digital downloads
Currently, digital goods and services imported by the customer are not subject to GST. The proposed application of GST will now be applied to all offshore services and intangible products sold online straight away without a threshold from 1 July 2017.
If you have any questions about anything in the budget please feel free to get in contact with me.