Assistance for unincorporated small business

The following changes affecting small businesses have been recently passed by the federal government in principle and is currently waiting royal assent:

• The company tax rate will be progressively reduced to 25% over 10 years. Starting from 1 July 2016, the company tax rate for businesses with annual turnover of less than $10m will be reduced to 27.5%.
• The small business entity turnover threshold will be increased from $2m to $10m from 1 July 2016 for the purposes of accessing certain existing income tax concessions. These concessions are:
  • a lower small business corporate tax rate (which will be reduced to 27.5% from the 2016/17 income year)
  • simplified depreciation rules including the instant asset write off threshold of $20,000 available until 30 June 2017
  • simplified trading stock rules
  • capital gains tax relief for genuine restructures of businesses (ie from a partnership to a company)
  • an option to account for GST on a cash basis and pay GST instalments as calculated by the ATO
  • a simplified method of paying PAYG instalments calculated by the ATO, and
  • other tax concessions such as the extension of the FBT exemption for work-related portable electronic devices available from 1 April 2016 and the immediate deduction of professional expenses.