There is some important tax information that we wanted to share with you.
1. Change to small business concessions and company tax rate:
Parliament agreed last week to extend certain concessions to small businesses. We are still reviewing the proposed legislation however our current understanding of what was passed is as follows:
· From the FY 16 - 17 year – the definition of small business will be extended to businesses with sales of less than $10 million. Small businesses operating in a company will be eligible for a reduced company tax rate of 27.5% and will able to access some of the other small business concessions - such as the accelerated write off for items less than $20,000. The broadening in the definition will not apply to the capital gains tax concessions. There were also additional concessions made to trust and sole traders who run businesses with sales between $2 million and $5 million.
· From the FY 17-18 year – companies operating a business with less than $25 million will have a reduced tax rate of 27.5%
· For the FY 18-19 year – companies operating a business with less than $50 million will have a reduced tax rate of 27.5%.
· The company tax rate for the above businesses will be reduced to 25% by 2027.
If you would like to discuss the impact of these changes to your business, please contact us.
2. Superannuation changes
As you are aware numerous superannuation changes have been announced and will take effect from 1 July 2017. These rules limit the amount of future contributions to superannuation, TRIS pensions and affect clients with more than $1.6 million of superannuation investments. If you would like us to review your superannuation situation and consider these changes please contact our office and make an appointment during the period 22 April to 31 May 2017. For clients who have us undertake the compliance of their superannuation fund, there will be a one hour meeting included in your current fees.
3. Removal of $20,000 instant asset write-off
For small businesses with turnover less than $10 million the instant asset write off for assets less than $20,000 will cease 30 June 2017. Please consider any purchases to enable these to be processed prior to year-end.
4. Tax Returns due
If you have not sent in your information to prepare your tax return for the year ended 30 June 2016 we request your information is sent our office as soon as possible.
Please do not hesitate to contact our office if you wish to discuss any of these matters.
Due to the significant law changes during the year and the delays with ATO systems and processing we are experiencing a very high volume of work. We appreciate your patience during this period if we take a little longer to get back to you.
Nicole Bryant and The Macro Group Team.