The 2015 Budget and what it means for your business
The 2015 Budget delivered last week contained some very good stimulus and ideas for small businesses in Australia.
Small businesses will benefit greatly from the Government’s “Growing Jobs and Small Business Package” which is aimed at helping small business to invest, grow and employ more people.
$20,000 small business tax break.
The biggest 2015 Budget announcement for small business was the temporary increase to the instant asset write-off, allowing small businesses to claim back purchases of up to $20,000.
Treasurer Joe Hockey explained, “From tonight until June 30 2017, small businesses can claim immediate deductions for sub $20,000 purchases, rather than having to claim those purchases as deductions spread over several years”.
This is a significant increase from the current $1,000 threshold.
Mr Hockey added “Cars and vans, kitchens or machinery . . . anything under the amount is immediately 100% tax deductible”.
The Government has allocated $1.75billion for this initiative and it is significant given the slow growth Australia is currently experiencing.
The Australian Government has identified that small business is now the key to this country’s recovery off the back of a declining mining boom. Mr Hockey added, “Every business started small. This incentive is designed to get them to think big and become big”.
This initiative is a good one and will hopefully do just that.
Company tax rate falls.
The Government has also confirmed tax cuts for incorporated and unincorporated small business entities from the 2015-16 income tax year. This will provide much needed support.
The rate will be reduced from 30% to 28.5%.
Small businesses will also benefit from a 5% discount on income tax payable on income from business activity. This discount will be capped at $1,000 per individual for each income tax year, and delivered as a tax offset.
This will mean small business owners will need to carefully assess whether they should incorporate or not.
Deductions for new businesses.
Small business is also able to claim immediate deductions for a range of professional expenses associated with starting a new business – such as professional, legal and accounting advice – instead of spreading the deduction over five years as it currently stands.
Need new equipment NOW but don’t have the cash? – Use finance!
Finance allows you to acquire the equipment you need now to get your immediate tax deduction but spreads your payments over a number of years.
There has never been a better time to upgrade your equipment.
Crowd source funding.
Joe Hockey’s budget has also allowed easier access for small business to crowd source equity funding by providing adequate funding to ASIC to simplify reporting and disclosure statements.
Red tape to be cut.
The Government has also undertaken to cut red tape and this will help small businesses with less paperwork and more efficient process.
So, in summary
All in all the budget was a positive one for small business. In a challenging business environment the government has tried to stimulate the small business sector and encourage spending.
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