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Nov 2018

What’s new in tax concessions for small business?

November 5, 2018
Capify Australia

Small business tax concessions make a big difference to every SME. The last few years have seen more Australian SMEs become eligible for most small business tax concessions. This is great news for SMEs as a reduced tax burden frees up valuable cash flow for investment, diversification and growth. Here, we give you a brief rundown of three key players in small business tax concessions.


$20,000 instant asset write off

Now Australian SMEs can keep more money in their pocket for the forthcoming financial year. The ATO $20k tax break is one of the most key small business tax concessions. Now the $20,000 instant asset write off has been extended to 2019 and you can use this tax break several times. This big player in small business tax concessions is on a per asset basis. What is more, it applies to most new and second hand depreciating assets purchased for your business.


Lower company tax rate

Another noteworthy provision in small business tax concessions is the lower company tax rate. The 2017-2018 financial year saw the lower company tax rate of 27.5% applied to base rate entities. To be considered a base rate entity you need:

  • A turnover of less than $25 million in 2017-2018 ($50 million from 2018-2019); and
  • 80% or less of their assessable income as base rate entity passive income


Naturally a lower company tax rate enables you to keep more money in your SME for growth and investment.


Small business income tax offset

Does your business turnover less than $5 million a year? If so, you may be able to make use of the small business income tax offset. You can get a maximum offset of $1000 per year per person for all your small business income sources. Income that is eligible for the offset is your net income, being sole trader business income after deductions or your share of partnership or trust net small business income less your deductions relating to that share.


Small business tax concessions make tax less taxing on SMEs. Chances are your small business is eligible for all or at least some of these small business tax concessions discussed here. That means you have more money to keep in your business. If you have your eye on acquiring a new asset or investing in business growth and need an additional financial leg-up to make it happen, speak to Capify about our flexible small business loans today.


Or call 1300 760 930 to speak with one of our friendly Lending Consultants now.

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