Government Grants
Some COVID-19 related Government Grants are tax free income (non-assessable non-exempt income) for a small business entity with turnover below $50 million. It is best to check with your Tax Agent for the grants you have received.
Superannuation
Superannuation for employees is only a deduction for tax purposes once it has been paid to the super fund. Paying superannuation contributions before 30 June will ensure you receive a tax deduction in the current year.
Small Business Tax Concessions
There are a number of tax concessions available for small businesses (sole traders, partnerships, trusts and companies), however the definition of small business differs for some of the concessions.
Immediate write-off of assets and Temporary Full Expensing
The ability to deduct the full cost of assets purchased (with some conditions noted below) will end on 30 June 2023.
From 1 July 2023 to 30 June 2024 individual assets up to $20,000 will be eligible for immediate write-off for small businesses.
Conditions up to 30 June 2023;
Company Tax Rate for Small Business
For small businesses with annual revenue less than $50 million the company tax rate is 25% for the 2023 tax year.
From 1 July 2016 small business companies must base their franking distributions on the current tax rate.
Capital Gains Tax Concessions
Small businesses can access a range of Capital Gains Tax concessions if the annual revenue of the business is less than $2 million or the net asset value of the business assets is less than $6 million . There are also specific concessions for small businesses changing their business structure meeting the restructure criteria.
Small business income tax offset
Individuals with business income from an unincorporated small business (sole traders, partnerships and trusts) are entitled to a tax offset for tax payable on the business income.
For this offset businesses with annual revenue of less than $5 million are considered to be Small Businesses.
The offset is calculated as 16% of the tax payable on the business income up to a maximum of $1,000 per year.
Some COVID-19 related Government Grants are tax free income (non-assessable non-exempt income) for a small business entity with turnover below $50 million. It is best to check with your Tax Agent for the grants you have received.
Superannuation
Superannuation for employees is only a deduction for tax purposes once it has been paid to the super fund. Paying superannuation contributions before 30 June will ensure you receive a tax deduction in the current year.
Small Business Tax Concessions
There are a number of tax concessions available for small businesses (sole traders, partnerships, trusts and companies), however the definition of small business differs for some of the concessions.
Immediate write-off of assets and Temporary Full Expensing
The ability to deduct the full cost of assets purchased (with some conditions noted below) will end on 30 June 2023.
From 1 July 2023 to 30 June 2024 individual assets up to $20,000 will be eligible for immediate write-off for small businesses.
Conditions up to 30 June 2023;
- if they have turnover less than $10 million and have applied the Simplified Depreciation rules for small businesses ALL purchases must be immediately deducted, including balances of small business pools
- if they have turnover less than $10 million and have not applied the Simplified Depreciation rules for small businesses they can choose purchases to be immediately deducted, but must deduct balances of small business pools
- if they have turnover between $10 million and $50 million they can choose purchases to be immediately deducted
- if they have turnover between $50 million and $500 million they can choose purchases to be immediately deducted, but second-hand assets are excluded.
Company Tax Rate for Small Business
For small businesses with annual revenue less than $50 million the company tax rate is 25% for the 2023 tax year.
From 1 July 2016 small business companies must base their franking distributions on the current tax rate.
Capital Gains Tax Concessions
Small businesses can access a range of Capital Gains Tax concessions if the annual revenue of the business is less than $2 million or the net asset value of the business assets is less than $6 million . There are also specific concessions for small businesses changing their business structure meeting the restructure criteria.
Small business income tax offset
Individuals with business income from an unincorporated small business (sole traders, partnerships and trusts) are entitled to a tax offset for tax payable on the business income.
For this offset businesses with annual revenue of less than $5 million are considered to be Small Businesses.
The offset is calculated as 16% of the tax payable on the business income up to a maximum of $1,000 per year.