Small business can take advantage of $20,000 immediate write-off
In March 2017, as part of Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016, the definition of a small business was changed to include those enterprises with an aggregated turnover of less than $10 million.
At the same time, the government was able to secure company tax cuts. These changes meant that from the 2016/2017 financial year, companies with an aggregated turnover of less than $10 million would be paying tax at the rate of 27.5 per cent, a 2.5 per cent reduction.
Companies with a turnover of up to $25 million would also receive the 2.5 per cent reduction to 27.5 per cent from the 1st of July 2017.
More businesses will be entitled to deduct plant and equipment assets with a value of less than $20,000 immediately.
The changes also meant that concessions introduced during the May 2015 federal budget, which allowed small businesses with an aggregated turnover of less than $2 million to claim an instant asset write-off, would be extended to include those enterprises who met the new turnover threshold of less than $10 million.
While these concessions were originally planned to end on the 30th of June 2017, the government has proposed that these changes will be extended by an additional year as part of the 9th of May 2017 federal budget.
Essentially this means more businesses will be entitled to deduct plant and equipment assets with a value of less than $20,000 immediately and for a longer period than initially planned.