Here is a brief summary of the May 2016 Federal Budget which impacts on small business from 1/7/2016:
- The small business income tax offset will increase from the current 5% to 8%. It benefits sole traders.
- The company tax rate will reduce from 28.5% (for 2015/16 financial year with turnover less than $2M) to 27.5% (for 2016/17 financial year onwards with turnover less than $10M)
- The small business turnover threshold will increase from $2M to $10M turnover. The benefits include, apart from the reduction in company tax rate mentioned above, simplified depreciation rules and the instant asset write-off for up to $20,000 per item if purchased by 30/6/2017.