Thinking of starting your own business? Your timing is impeccable.
Tax cuts, a rolling up of red tape and big deductions announced in Tuesday night’s Federal Budget make it about as good a time as ever to go it alone.
Here’s a quick wrap of the new carrots Joe Hockey is dangling in front of wanna-be entrepreneurs.
Businesses turning over less than $2 million – which your new venture will definitely fall in to – are about to get a 1.5 per cent tax cut to 28.5 per cent. The catch is it needs to be an incorporated business, so set up as a company.
Failing that, there’s also a 5 per cent tax discount to unincorporated businesses with annual turnover less than $2 million.
These kick in from 1 July 2015.
The rather large carrot allows small businesses to make immediate tax deductions for any individual assets they buy costing less than $20,000. To clarify, this means you can deduct the cost from your income and so pay less tax.
This $20,000 rule can be used for as many individual items as you like.
This juicy number starts from Budget night and is slated to continue until the end of June 2017.
Red Tape Roll Up
Work‑related portable electronic devices will now be exempt from Fringe Benefits Tax. Again, this makes things a bit more affordable.
There’s also Capital Gains Tax rollover relief for small businesses changing their legal structures but keeping the same owners, but that’s one for later.
If you need some extra hands to get your business going or growing, big Joe’s got another carrot for you, too. Employers who offer job seekers an ongoing job can now receive a wage subsidy with flexible payment arrangements.
So a bit in it for small and new businesses.
In a nutshell, there’s rarely been a juicer set of incentives for kicking off your own operation in Australia.
Image: Brian Johnson & Dane Kantner, via Flickr