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Tax concessions favour small business

Every small business owner knows what it takes to turn a profit so when there’s an opportunity to increase profits by using tax deductions, grab it with both hands!

This is what’s available:

  1. The small business turnover threshold is now $10 million, up from the former $2 million. This allows more businesses to benefit from a range of concessions, including the $20,000 instant asset write-off, which has been extended to 1 July 2018, and the lower company tax rate.
  2. The annual company tax rate for small business is now 27.5%. This applies only to the aggregated turnover of “small business entities” which include companies, corporate unit trusts and public trading trusts with a turnover of less than $10 million.
  3. On this basis, the maximum franking credit that a small business owner can now allocate to a frankable distribution is 27.5%. As these changes were back-dated to 2016/17, talk to your tax adviser if you issued dividends during that time.
  4. The small business income tax offset is 8% with a limit of $1,000 per annum. This offset is limited to businesses with a turnover of less than $5 million and applies only to business income for sole traders, or the share of business income for partnerships or trusts.

As always, tax law is never simple, so contact TNR to ensure you are making the most of the available tax concessions for your business.