10 Nov 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.
- 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.
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