Budget 2015: Small businesses win big

29 June 2015

A range of benefits and advantages for small businesses (SMEs) were unveiled when the 2015 Budget was announced in mid-May. We’ve put together a brief snapshot of what may be in store for your SME under the new Budget.

As we highlighted in the May issue of Outlet, all small businesses will get an immediate tax deduction for any individual assets they buy costing less than $20,000. This $20,000 limit applies to each individual item and SMEs can apply this rule to as many single items as they wish.  Small businesses can enjoy this benefit for another two years, with the $20,000 limit continuing until the end of June 2017.

TAX CUTS

Tax time might not be the squeeze you were expecting, with the tax rate being reduced for more than 90% of incorporated businesses with an annual turnover less than $2 million. The company tax rate for these businesses will be reduced by 1.5 percentage points to 28.5%.

And to assist with the growth of SMEs, the Government will also provide a 5% tax discount to unincorporated businesses with an annual turnover less than $2 million from 1 July. This delivers a tax cut of $1.8 billion over the next four years.

CUTTING RED TAPE

SME employees can connect to the digital economy at minimal expense with the Government expanding the Fringe Benefits Tax (FBT) exemption for work related portable electronic devices. The FBT removal covers phones, tablets and laptops and has been touted as a big win for SMEs.

SMEs will also benefit from Capital Gains Tax rollover relief when changing their legal structures but keeping the same owners.

This is a very general guide of Budget benefits for SMEs. For further information specific to your business, please seek financial advice or visit www.ato.gov.au

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