Tax Concessions Favour Small Business
- 360South
Every small business owner knows what it takes to turn a profit so when there’s an opportunity to increase profits by using tax deductions, grab it with both hands!
This is what’s available:
- The small business turnover threshold is now $10 million, up from the former $2 million. This allows more businesses to benefit from a range of concessions, including the $20,000 instant asset write-off, which has been extended to 1 July 2018, and the lower company tax rate.
- The annual company tax rate for small business is now 27.5%. This applies only to the aggregated turnover of “small business entities” which include companies, corporate unit trusts and public trading trusts with a turnover of less than $10 million.
- On this basis, the maximum franking credit that a small business owner can now allocate to a frankable distribution is 27.5%. As these changes were back-dated to 2016/17, talk to your tax adviser if you issued dividends during that time.
- The small business income tax offset is 8% with a limit of $1,000 per annum. This offset is limited to businesses with a turnover of less than $5 million and applies only to business income for sole traders, or the share of business income for partnerships or trusts.
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As always, tax law is never simple, so contact us to ensure you are making the most of the available tax concessions for your business.