Ok, we’re guessing you didn’t tune in to see the Budget live last night! Rather than suggest you watch the replay, we’ve saved you the time by giving you the lowdown on the key areas you need to know about.
Overall there were a few good wins for trades and small business owners. The biggest benefits are tax cuts, increases to the asset write-off limits and more incentives to take on young, unskilled workers.
Here are the changes in more detail…
Drop in Company Tax Rate & Increased Revenue Threshold
The biggest announcement is the company tax rate for small business will drop to 27.5 percent and the definition of small business has gone up to $10 million in revenue per annum.
Over the next ten years that revenue threshold will increase to include larger and larger businesses and by then the company tax rate will be down to 25%.
For more than 800,000 SMEs, these measures translate into two tax cuts in as many years, while a further 60,000 will see an instant tax reduction of 2.5 per cent.
Changes to write-offs of equipment
Immediate write-off of equipment purchases valued up to $20,000 that will last until the end of June 2017, will now apply to those businesses with revenues up to $10 million as well.
Previously, it was only small businesses with revenues up to $2 million but now it’s up to $10 million.
This will mean an additional 100,000 business owners can confidently purchase or upgrade assets that will allow them to grow and to innovate well into the future.
For tradies, items like tools, trailers, computers and even vehicles up to $20,000 in value each, can be written off in the 2017 tax year rather than put on the books as an asset and depreciated over time.
This could result in significant tax deductions in the year those items are bought.
The other major announcement is a new youth jobs program. It starts with a skills based training program and then the opportunity for them to become an intern in a business.
The business will receive $1,000 to take them on as an intern and the intern will get $200 a fortnight on top of their usual benefits. If the business decides to offer them a full-time job there’s a $10,000 incentive for the business to do so.
This is a good incentive to get youth into the workforce to gain experience and compensate business for taking on unskilled youth and giving them a go.
NOTE: We aren’t tax or financial experts, so make sure to check these changes and their impact on your business with a qualified accountant or financial adviser.