Leading up to the budget it seemed as the small business may be overlooked, however there are a few key issues to be aware of that we’ve outlined below.

Tax concession extension

Potentially the most relevant issue to small business owners was the extension of the company tax concession. The Government has extended the $20,000 instant asset write-off scheme for another year off the back of calls for an extension. It will run until June 30, 2018, and assist businesses that turn over up to $10 million annually.It's viewed as a positive move that will hopefully stimulate the economy, increase investment and productivity of the sector.

Tax rate lowered

The company tax rate for incorporated small businesses drops from 30% to 27.5%, and will drop down to 25% by 2026-27. It applies to all businesses with a turnover of up to $50 million. In another change, the definition of a small business has been expanded from $2 million to $10 million.[/vc_column_text][/vc_column_inner][/vc_row_inner]

Skill shortage visas

There is a new levy on small businesses hiring new employees on working / skill shortage visas. A temporary employee sets you back $1200 a year whereas a permanent hire will incur a one-off $3000 fee. Experts predict that the levy will likely lead to extra compliance costs, especially in service based industries.

Reduced red tape

The government has pledged to spend $300 million in the next two years encouraging the states and territories to create innovative ideas of how to reduce red tape for small businesses. The fund will reward states and territories that remove any unnecessary regulation with the idea stemming from the Harper review of Competition Policy.


Key takeaways

To get started, take some time to see if you can make the most of the instant asset write-off. There is an opportunity to improve your cash flow and deduct the value of eligible assets straight away, instead of over a period of years. However, make sure you are eligible first before you start spending!

There are new measures that kick in for the new financial year beginning on July 1, such as new superannuation rules which are worth familiarising yourself with. In another change, small businesses will only need to report GST on sales, GST on purchases, total sales on their Business Activity Statement (BAS).

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The advice provided in this article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation, and needs.