Tax Tips

Small Business


Eligibility for small business tax regime


Small business entities (SBEs)- individuals, partnerships, companies and trusts with a turnover of less than $2million.



Maximise depreciation deductions


Small business entities will now get an immediate tax deduction for nearly all individual assets they buy for the business costing less than $20,000 each. As from 7:30pm AEST on 12th May 2015 this replaces the previous asset write-off threshold of $1,000.


Businesses assets first used, or installed ready for use prior to that time SBEs can claim an immediate deduction where assets cost less than $1,000 each, and are used to produce an income.


For businesses that are registered for the GST, the threshold is calculated on a GST-exclusive basis. For businesses not registered for the GST, the threshold is calculated on the GST-inclusive basis.   

Depreciating assets that are not immediately deductable (assets costing $20,000 or more)



Take advantage of the tax rate cut from 1 July 2015


The proposed reduction in the company tax rate to 28.5% from 30% for companies that meet the SBE test. Additionally, there is a proposed small business tax discount of 5% on income tax payable on business income received from an unincorporated entity that meets the small business entity test: this is capped to $1,000 per individual.


Eligible businesses could consider whether it's possible to bring forward expenses into this financial year, when they will receive a higher deduction for such expenses and delay revenue into the next financial year, as that revenue will be subject to a lower tax rate.


Care should always be taken to ensure that any actions don't breach the tax general anti-avoidance rules or any specific provisions such as the tax prepayment rules.


Small business entities should seek professional advice to understand how they may legitimately benefit from the income tax reduction if they are eligible.





Maximise vehicle deductions


Use of your car for travel related directly to your work and your claim of kms travelled for the year does not exceed 5000kms you can claim a deduction. Car expenses are claimed on a cents per km basis. The allowable rate for such claims change annually so make sure you obtain this year's rates from the ATO website.


When your business travel exceeds the 5000kms it may be possible to claim one-third of actual car expenses or 12% of the original value of the vehicle without a log book.


Alternatively if your work related travel exceeds 5000kms then you may be able to claim a deduction for your total car running expenses to the extent the car was uses for work. However such claims are only available where you have kept a logbook of the odometer readings and receipts.


You can contact us to clarify what constitutes work related travel, and which of the above methods can be applied to maximise your tax position.



Consolidate your super


Have all your super in the one place. This will reduce the amount of fees you're paying, reduce the amount of paperwork you receive and you only have to keep track of one fund. Have only one fund also means you can take it when you change jobs.


Look to consolidate the super funds you have into one fun, then compare your funds to work out which best suits you. Important things to look at are the fees and charges, the investment options available and like insurance cover. You can look at the past investment performance as well, but remember it's no guarantee of how the fund will perform in the future.


Once you have chosen the fund you want to keep, contact them and they can help with transferring the money from your other super funds.


If you have moved or changed jobs on the occasion your superfund may have lost track of you and you may miss out on some of your super. To find lost super check out the Super-seeker tool under "Find your lost super' on the ATO website.


Note: The list is not exhaustive and you should always speak to us about your specific circumstances.



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