The 2015 budget
The 2015 budget has signalled two key points from the Federal Government. Firstly, a clear intention to reduce our budget deficit from over $40 billion to $6.9 billion over the next 4 years. The means less debt for Australia and a stronger credit rating which keeps our country in a very healthy position compared to other advanced nations.
Secondly, the Federal Government recognises that backbone of this country is the small business sector. Those are businesses turning over less than $2 million per annum, and are effectively what you see day to day at every turn, in every office and every shopping centre and on every building site. For those businesses, the budget includes relief measure to improve confidence and cash flow. These measures are reduced tax rates, a $20,000 instant asset write-off for new acquisitions, CGT relief on structure changes and formation costs deductions.
Both these announcements have an extremely positive effect on business confidence and encourage spending, which of course then stimulates the economy and drives the employment numbers back up in the right directly.
The business tax break in a nutshell:
The four most significant benefits to small businesses from the budget:
- Tax rate reduction
- $20,000 instant write-off for asset purchases
- Instant write-off of new business formation costs
- Capital Gains Tax roll-over relief if changing structure
So while this is happening, all good businesses should take full advantage of these stimulus measure and seek to maximise profits and value-growth. Importantly though, it is essential that business owners seek professional advice on the impact of any decision they make with respect to these incentives. You have to truly understand the bottom-line benefit of your business before committing to any spending. And of course very importantly, the senate does need to approve these budget announcements, so stay tuned!
Speak to us at Trak for more details on these great benefits to your business and how best to approach them.