Posted by LNA Master Landscapers Association
on 16 May 2016
This year's Federal Budget saw the announcement of tax cuts for small businesses and sole traders. These changes will affect many LNA members and are outlined below.
The information in this article has been sourced from an article written by Nassim Khadem for the Sydney Morning Herald newspaper. To read the article in full click here.
From the 1st of July 2016, 870,000 small businesses will have their tax rate reduced by 1 percentage point to 27.5%. Furthermore, the turnover threshold for small businesses qualifying for this tax cut will be increased from $2 million to $10 million.
Around 60,000 sole traders will also receive tax cuts of 2.5%, with turnover again increasing from $2 million to $10 million.
The unincorporated small business tax discount will also increase to 8% and will be incrementally increased further to 16% in stages until 2026-2027. The turnover threshold for this will increase from $2 million to less than $5 million for qualification in this business category.
Access to instant write-off purchases of equipment valued at $20,000 each will also now be offered to businesses with a turnover of less than $10 million, with this tax benefit slated to end on the 30th of June 2017. This instant-write off clause, first introduced in last year's budget had previously only been available to businesses with turnover of less than $2 million. This measure cannot be used to purchase business inventory but can be claimed for items such as vans or utes, coffee machines, furniture and tools.
The Government has also announced it will be working towards introducing new Business Activity Statements (BAS) from July next year.
If you have any questions regarding how these new tax arrangements will affect your business please consult your business tax advisor.