Highlights from the 2015 budget

Budget 2015 wrap – Small businesses, jobs and families were front and center in this year’s budget, which focused on plans to restore confidence in the economy.

Valuable concessions for small business.  Australia’s 2.1 million small businesses received a boost from Tuesday’s Federal Budget with tax cuts and immediate deductions available on asset purchases.

The measures introduced for small businesses include:

  • A 1.5 percent cut in company tax from 30% to 28.5% for incorporated small businesses
  • A 5%tax discount for unincorporated businesses up to $1000 per year.
  • An immediate tax deduction for any individual asset costing less than $20000.
  • Changes to the tax treatment of employee share schemes.
  • Ability to change business structures tax-free.
  • Fringe benefits tax exemption for portable electronic devices.

SMALL BUSINESS TAX CUT

The 1.5% tax cut applies to incorporated small business.  Unincorporated businesses (such as sole traders, trusts or partnerships) with a turnover of less than $2 million will receive a 5% discount on income from 1 July 2015, capped at $1000 in any tax year.

THRESHOLD FOR TAX DEDUCTIONS INCREASED

All small businesses will get an immediate tax deduction for any individual asset they buy costing less than $20000.  This went into effect at 7.30pm on 12 May 2015, as it was announced, and is available until 30 June 2017.  This is a stark contrast to the previous threshold of $1000.  Small businesses can now apply this $20000 rule to as many individual assets as their business requires.