2016/17 Tax Return: What is new for small Business?

1. Small business income tax offset for small business sole trader or for share of net small business income from a partnership or trust

  • From year 2016/17 this offset has been increased to 8%, with a limit of $1000.
  • The offset is available for small business with turnover less than $5 million.

2.  Lower tax rate for companies with turnover less than $10 million

From year 2016/17 tax rate for small companies has been reduced to 27.5%.

3. Simplified depreciation rule – instant asset write off of business assets costing less than $20,000 each

Turnover threshold for simplified depreciation and instant write off has been significantly increased to $10 million from $2 million. From 1 July 2016 this depreciation rule applies to businesses with turnover less than $10 million.

More small businesses are now eligible for this benefit.

What is Simplified depreciation rule

  • Immediate write off of assets that cost less than $20,000 each.
  • Pool most other depreciating business assets costing $20,000 or more and claim 15% deduction for the first year irrespective of purchase date and claim 30% deduction from next year.
  • Write off balance of pool at the end of an income year if the balance before applying any depreciation deduction for the year is less than $20,000.