The Abbott government’s budget for 2015 has strong advantages for small to medium businesses across Australia. Here’s how the new measures may affect you:
Small businesses will be able to claim a tax deduction on any asset purchase that costs up to $20,000 until June 30th, 2017. Previously, the threshold for asset claims only reached $1000 but with the new budget, there’s more breathing space so you can buy that extra ute.
Assets can include anything under $20,000 including vehicles, computers, coffee machines, printers and machinery. Assets under the new threshold are instantly tax deductible meaning you can receive up to $6000 back before the end of the financial year without spending significant time tracking your purchase during the year. If your small business is not making a profit, however, then the tax deduction won’t be of much use and it may be smarter to wait until you are in budget surplus.
From July this year, small businesses also get a company tax cut of 1.5%, designed to deliver the cash flow needed to strengthen your business, employ extra help and invest in alternative marketing channels.
Peter Strong from the Council of Small Business celebrates the new measures and says there are many highlights in the budget that are advantageous to small businesses.
Take note though, the ATO defines a small business as an individual, partnership or trust with an aggregated turnover of less than $2 mil in one year.
For more information on the new budget measures for small businesses, view the details here.