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Budget Spotlight - Small Business

If you own a small business (ie. you have a turnover of less than $2m) then today you are a WINNER. Last night's budget recognised the significant contribution of small business to the economy and aims to encourage investment and growth.

Some of the incentives contained in the Jobs & Small Business Package include:

- Immediate tax deduction for assets costing less than $20,000 (for asset purchases made from today to June 2017). Currently, an upfront deduction is only available for assets under $1,000.

- For incorporated small businesses, a tax cut of 1.5% (ie. tax rate of 28.5% rather than 30%). The franking credit rate will remain at 30%, meaning shareholders pay less tax on dividends distributed by the company.

- For unincorporated small businesses (sole traders, partnerships & trusts), a 5% tax discount, capped at $1,000 per individual.

- Capital gains tax rollover relief when changing your legal structure but keeping the same owners. Eg. moving from a sole trader to a company or trust.

- Immediate tax deduction for certain start up business expenses such as legal fees. Under previous rules, these were only deductible over 5 years.

- FBT exemptions where employees are provided with multiple work-related portable electronic devices such as a laptop and an iPad, even though they have similar functions. Under current law, only one device would be exempt from FBT.

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