Change to business size classifications

Change to business size classifications

Change to business size classifications

Did you know your medium-sized business might now be classed as a small business? Here’s why it’s very good news!

Are you sick of seeing the ATO give all the perks to small businesses, just because you’ve worked hard to increase your company turnover?

Well, you might not have heard the buzz, but even if your business is turning over up to $10m you are now considered a small business.

And that’s great news for a number of reasons!

Taking effect from July 1, 2016 the small business entity turnover threshold increased from $2m to $10m.

This means that businesses with a turnover of less than $10m will be able to access small business concessions.

 

These include:

  • Simplified depreciation rules;
  • Immediate deduction for business assets purchased under $20k (this applies until 30 July 2017);
  • Other business assets purchased over $20k can be added to the general pool;
  • The ‘pool’ has different depreciation rates. 15% is claimed in the first year the asset is added in (no matter when it is purchased in the financial year) and 30% is claimed each subsequent year;
  • Accelerated depreciation for primary producers who can now claim immediate deductions for fencing (previously claimed over 30 years) and water facilities (previously claimed over 3 years);
  • Simplified trading stock rules. A business does not have to carry out a year end stocktake if the movement is under $5k;
  • An option to account for GST on a cash basis instead of accrual;
  • Option to pay GST instalments as calculated by the ATO;
  • Access to the reduced company tax rate of 27.5% (from 1 July 2016)

The $2m turnover threshold will remain for the small business capital gains tax concessions.

Want to know how these changes will affect your business specifically? Contact the friendly team today at We All Count on (08) 8531 0577 or admin@weallcount.com.au.

 

General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.

zoe

Zoe Pearson

Accountant