As usual, “the devil is in the detail” when it comes to any government announcement. Nothing is certain until it has been passed by the Senate, so don’t act on this without checking with your financial adviser first. Please note the timing of the introduction of each measure…they don’t all start on 1st July 2015.

Blog: 2015 Federal Budget Review

Small Business Tax Rate Cuts

If your business turnover (gross income before deductions) is less than $2M, The company tax rate will drop from 30% to 28.5% from July 2015

If you are an individual operating a business as a sole trader, partnership or trust; you will get a 5% tax discount – limited to $1,000 per tax payer.

Accelerated Depreciation

If your business turnover (gross income before deductions) is less than $2M, and the asset costs less than $20,000, and the asset is installed, ready to use between 12th May 2015 and 30th June 2017 - you will be able to write off the entire asset in the year that you pay for it.

Farmers: This includes fencing, water facilities, dams, tanks, bores, irrigation, pumps, windmills…but after July 2016.

Hint: if the balance of the pool of assets that you've bought in the past, falls below $20,000 during 30th June 2015 – 30th June 2017: YOU CAN WRITE OFF THE REMAINING BALANCE OF THE POOL AS WELL!

Exceptions to the rule: Horticultural Plants and computer software developed in-house – there are special rules around these already.

Farmers: grain and feed storage silos etc can be written off over 3 years

Business Start-up

  • You can write off professional expenses (legal, accounting, consultants etc) up front from 1st July 2015
  • Registering a company or business will be made quicker and easier with the establishment of a single online portal (business.gov.au)
  • Innovative funding options (eg crowd-source equity) will be regulated so that small businesses can safely access them

Capital Gains Relief for Small Business

If your business turnover (gross income before deductions) is less than $2M, you can change your business structure without incurring a capital gain

Fringe Benefits Tax

From April 2016 if your business turnover (gross income before deductions) is less than $2M, you can provide your employees with more than one portable electronic device without having to pay FBT on it.

Car Expenses

For individuals who use their cars for business less than 5000km per year, you will be able to calculate the deductible portion of your car expenses at a flat rate of 66 cents per km. Log book method still remains, however the 12% of cost and 1/3rd of actual expenses method will be axed from 1st July 2015.

Backpackers Beware!

If on a working holiday, they will be taxed at 32.5% flat. Regardless of how long they are here.

FIFO Zone offset

If you don’t live in an isolated zone, but fly-in/fly-out to work in an isolated zone, you will not be able to claim the zone rebate from 1st July 2015.

GST on intangible services

From 1st July 2017, GST will be applied to digital products (streaming or downloading of music, movies, apps, games e-books etc)

Please contact us should you require any further information…and definitely contact us before acting on this information. This is basically a business review…we haven’t gone into the personal side too much or things like Medicare or Parental Leave etc.