Instantly write-off new assets that cost less than $20,000
The 2015 Federal Budget announced that small businesses with an aggregate annual turnover of under $2 million can claim immediate tax deductions for all asset purchases costing less than $20,000 made until June 30th 2017. The immediate tax deduction threshold is only applicable for qualifying assets that were purchased from 7.30pm on 12 May 2015, and are ordered, installed or ready for use by 30 June 2017.
Defer your income
With the small business tax rate dropping to 28.5 percent next year, deferring some income until after June 30 means that any dollar you’re paid in next financial year you’ll pay less tax on. This is particularly beneficial for services businesses who are planning to issue invoices in the coming days. You’ll also give yourself another 12 months of grace before you need to pay tax on this income.
Company tax rates are on the way down–they currently sit at 30 percent. In the new financial year the government is set to cut that rate to 28.5 percent for companies with turnover less than $2 million. If you’re looking to spend money on your business, the current financial year is the time to do it so your business can get the full deduction for asset purchases under $20,000. If you’re a small business, you’ll also reduce your company tax this year when you are paying 30 percent.
Get yourself set up for the new financial year
To fully prepare your business for the end of financial year, schedule a time to speak with Rands Financial Services – Accountant + Finance Broker.