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Tax Consessions for Small Businesses

By Matthew De Zilwa on 02-Jan-2018


The Australian Tax Office has made some changes to the tax concessions available to small business entities and their purchases over the 2017/18 financial year. Here are three key changes that relate to income and concessions in your business:

2017-2018 Income Year:

In the current financial year, if your company is recognised as a base rate entity, it is eligible for the lower 27.5% company tax rate. Note that you still need to be a small business to be eligible for other tax concessions (more on that below).

What is a base rate entity? It's an entity that has a turnover of less than the current threshold, of $25 million (up from the previous $10 million).

The lower 27.5% company tax rate will progressively apply to base rate entities with a turnover less than $50 million by the 2018–19 income year. From 2024–25, the lower company tax rate will reduce each year until it is 25% by 2026–27.

Instant Asset Write-off for Small Business:

The ATO has made an extension to the instant asset write-off for small business purchases of less than $20,000 until the 30th of June 2018. This means that you can immediately deduct the business portion of most assets that cost less than $20,000 so long as they were purchases between the 1st of July 2016, and 30th of June 2018, and your turnover is less than $10 million. This deductions covers assets both new or second-hand, and can be claimed on the applicable tax return in which the asset was first used, or installed for use.

Expanded Access to Small Business Concessions:

Since the 2016/17 financial year, a range of small business concessions are now available for most small business entities. Thee concessions are available to all businesses with a turnover of less than $10 million, previously, this turnover was $2 million.

To find out what specific small business tax concessions your business might be eligible for, head to the concessions page of the ATO website or get in touch with a member of our team here.

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