Another financial year is done and dusted, as well as another election. While things may feel a bit unsettled at the moment one thing that won’t be affected is tax law changes for small business. On May 3rd, Treasurer Scott Morrison handed down a Federal Budget with a big focus on small and medium-sized businesses to be among the first to receive new tax breaks.
The new budget wants to foster innovation by backing businesses to invest in themselves. According to the budget released in May –
- The Government will reduce the tax rate to 27.5 per cent, starting with businesses with a turnover less than $10 million on 1 July this year.
- From 2016-17, the discount will be available to businesses with annual turnover of less than $5 million, up from the current threshold of $2 million, and will be increased to 8 per cent.
- Over ten years the Government will decrease the tax rate on all companies to 25 per cent by 2026–27.
There will also be an extension of the instant $20,000 instant deduction for asset purchases of up to AU$20,000 into the 2017 tax year. This applies to devices such as computers and other business related hardware.
There is speculation that the new tax incentives could lead to more investment in mobile technologies for small businesses. This means that it may become easier for more businesses to operate remotely or from unfixed locations.
While Dr. Neo is not a tax expert, he does know technology and is happy to answer questions on how to make your new hardware purchases work for you!