I met Pauline at the BEC (Business Enterprise Centre) in Southern Sydney where she attended a Free Friday lunch I was speaking at. Like many small business owners at the BEC she got an insight into the awesome power that is LinkedIn but didn’t have the time to take full advantage of it. She hired me to put her LinkedIn profile together for her and during the information gathering process I was blown away with her quiet and understated experience and credentials in her core area of expertise, bookkeeping. She even gave me one or two tips about Xero accounting to help me navigate and read my own financial reports, something I personally am challenged with.
Pauline knows a huge amount of information about all things accounting, bookkeeping and taxation and was more than happy to be my first guest blogger. My direction to Pauline was; imagine the readers know nothing about that resent budget announcement, and that way it’ll be a blog for people just like me, that didn’t get it the first time!
Budget 2015 in Simple Terms
by Pauline Herring (Anywhere Accounting).
“What it means to small business”
Accelerated depreciation of $20,000 (net of GST) per individual item (new or used) will be a great boost to small business. The limit prior to the budget was $1,000 per item. Instead of waiting for 8 years to use deductions to write off a motor vehicle asset you will be able to claim immediately, therefore reducing the amount of tax payable in the financial year. The balance of assets in a general pool that is less than $20,000 will also be able to be totally written off as a deduction. This will continue until June 2017.
Company tax for small business has been reduced from 30% to 28.5% reducing the amount of tax payable from 1st July 2015.
Small businesses that are sole traders or partnerships also benefit with a 5% tax discount up to a maximum $1,000 and will also apply from 1st July 2015
From 1st April 2016 portable electronic devices that are provided for your employees for work related use are now no longer subject to Fringe Benefits Tax for small business.
Benefits to small business also include the capital tax rollover relief when changing their legal structures but keeping the same owners and also applies from 1st April 2016
If you are starting a new small business the start-up costs such as legal and accounting advice can be written off immediately instead of previously over five years.
The measures above are a great boost to small business and allow greater cash flow which in turn may help to grow their business. It will also stimulate the economy especially any business selling assets under $20,000.
Make sure you utilise these new incentives for small business.
Note: the definition of a small business for all these incentives above is a turnover of less than $2 million dollars