With tax time coming, it might be worthwhile revisiting whether your business is entitled to any small business concessions.
Small businesses with an annual turnover of less than $2 million may be eligible for a range of tax concessions, including the following:
- small business tax break;
- capital gains tax (CGT) exemption for assets you have held for at least 15 years;
- CGT 50 per cent active asset reduction;
- CGT retirement exemption;
- CGT roll-over for replacement assets;
- simpler depreciation rules (ie generally assets can be “pooled” for the purposes of determining depreciation deductions);
- simpler trading stock rules (ie in certain circumstances you can choose whether or not to do an end-of-year stock take);
- immediate deduction for certain prepaid business expenses;
- the entrepreneurs’ tax offset may reduce your tax payable by up to 25% where your business has a turnover of less than $75,000;
- GST can be accounted for on a cash basis;
- GST input tax credits can be apportioned annually for assets used partly for private and partly for business purposes;
- you may be exempt from FBT for employee car parking; and
- Pay as you go instalments can be paid and worked out based on your business and investment income in your most recently assessed tax return.
Is my business eligible?
A business will qualify for the above concessions if the “aggregated turnover” is less than $2 million. Your aggregated turnover is the sum of your turnover and the turnover of any entities you are connected or affiliated with. Turnover includes all income earned in the ordinary course of business.