The Federal Treasurer, Mr Joe Hockey, handed down the Commonwealth Government’s 2015/16 budget on Tuesday, 12 May 2015.
Small businesses with aggregated annual turnovers of less than $2,000,000 received special attention in this year’s budget.
Highlights for small business owners:
- 1.5% cut in the company tax rate, down to 28.5% from 1 July 2015
- 5% tax discount for unincorporated small businesses, capped at $1,000 per individual per year
- Immediate write-off of the cost of assets bought and first used in the business, or installed ready for use, between 12 May 2015 and 30 June 2017, subject to a cap of $20,000 per asset. This measure applies to both new and second-hand assets but does not apply to acquisitions of horticultural plants, primary production assets, software created in-house, capital building works or assets leased out to another party (including super funds)
- Capital Gains Tax rollover relief for changing the legal structure of the business from 1 July 2016 (e.g. CGT will no longer be payable if changing from say a trust structure to a company structure)
- Fringe Benefits Tax exemption if providing employees with more than one work-related electronic device, even where the devices provide similar functions (e.g. a tablet device and a laptop). Currently the devices have to provide substantially different functions to qualify. The exemption is to apply from 1 April 2016.
Measure for start-up businesses:
- Introduction of an immediate write-off for start-up expenses, including for legal and accounting advice and establishment costs paid to professional services providers
Work-related car expenses:
- From 1 July 2015, there will only be two acceptable methods for claiming motor vehicle expenses for work-related travel through your personal income tax return. Claims will be accepted using a rate of 66 cents/km up to 5,000km, regardless of the size of the vehicle. Alternatively, calculation based on actual expenses multiplied by a business usage percentage determined by keeping a detailed logbook will also be acceptable. The one-third of operating expenses and 12% of vehicle cost methods will no longer available.
Find out more details on the government’s plan for small businesses, and other areas within our comprehensive Federal Budget Report 2015-16.
Click here to access our Federal Budget Report 2015-16.
In partnering with LexisNexis® Capital Monitor, our experts have analysed the 2015 Federal Budget, with a focus on: business taxation, education, employment, health, infrastructure, not-for-profits, property & fund management, private clients and social services.
Should you wish to discuss the budget measures in more depth or better understand how they apply to your plans or circumstances, don’t hesitate to contact Moore Stephens.
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