Additional support for small business

Tax breaks for small business

The Government recognises the importance of simplifying taxation for small business.

From 1 July this year, all small businesses—whether they are run by sole traders, partnerships, trusts or through companies—will be able to immediately write off each eligible business asset they buy costing less than $6,500 per asset.

This measure will improve cash flow and reduce red tape for up to 2.7 million small businesses (with a turnover of less than $2 million) allowing them to reinvest more time and profits back into growing their businesses and improving productivity.

For example a café operating as an incorporated small business purchases a $2,000 lounge, a $4,000 coffee machine and a $3,000 fridge. Under the new rules the café can deduct the full amount of each asset, lowering their taxable income by $7,650 and providing a tax saving of $2,295.

Assets costing $6,500 or more will be depreciated in a single pool at 30 per cent (15 per cent in the first year).

These two measures are worth around $1 billion in the first year.

In addition, small businesses will be able to claim up to $5,000 as an immediate deduction for new or used motor vehicles acquired from 1 July.

Support for small business

The highly successful Small Business Advisory Service (SBAS), which funds service providers across Australia to assist small businesses through additional support and advisory services, will be made ongoing, with additional funding of $28 million over the next four years.

The Small Business Support Line, which provides information and referral services, will also be extended to 2015–16.

The Government will appoint an Australian Small Business Commissioner to represent and advocate small business interests to the Australian Government.