Deal sealed on small business concessions

Tuesday 6 June, 2017

Two years on from the original announcement, the business community can now rejoice over the passing of legislation introduced by the Turnbull Government that will allow more small businesses to access a number of concessions.

Having passed the Senate on March 31, the changes are centred around increasing the number of eligible businesses for small business concessions through lifting the turnover threshold from from $2 million to $10 million.

CCIQ’s General Manager for Advocacy Kate Whittle said the legislative changes reflected the modern economy and will be a stimulus for small business growth.

“This is definitely a win for all small businesses. With more businesses able to access concessions that were previously limited to a small number of businesses, we should see an injection of optimism, confidence and investment from the wider small business sector,” she said.

“Small businesses nearing the previous threshold can now grow without the fear of losing the range of concessions that they were eligible for.

“The concessions are expected to result in an increase in investment from these small businesses into new equipment, growing their operations, innovating and creating new jobs.”

Taking effect on July 1, these changes mean more small businesses are eligible for the immediate write-off of assets under $20,000, as well as tax deductions for expenses paid for a period ending before the next income year.

Other changes include:

  • Simplified trading stock rules which allow taxpayers to estimate the value of their trading stock on hand at year end, rather than conducting a stocktake where a reasonable estimation indicates that the stock movement is less than $5,000
  • Simplified Pay-As-You-Go instalment calculation method using the GDP-adjusted option
  • Accounting for GST on a cash basis and paying GST instalments as calculated by the Australian Taxation Office
  • Exemption from fringe benefits tax where work-related devices such as mobile phones, laptops and tablets are provided to employees.

There remains two tax concessions that will not be brought under the new threshold arrangements: the small business capital gains tax concession which remains for businesses with a turnover of under $2 million, and the small business income tax offset which sets the turnover threshold at $5 million.

Ms Whittle said the changes are particularly beneficial for businesses operating through a company as they coincide with a reduction in the company tax rate.

“The decrease in company tax from 30 per cent to 27.5 per cent starting from the next financial year ties in nicely with the changes to the small business turnover threshold when looking at what is needed for an effective, national tax reform.

“All eyes will now be on the Queensland Government as it hands down its State Budget next week to see what they will do in this space.

“In particular, CCIQ will be paying close attention to whether they will increase the payroll tax threshold and minimise the impact of what businesses are calling “a tax on employment”.”

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