2017 Budget Updates: Small Businesses

The Federal Treasurer, Scott Morrison has delivered his second budget. Mr Morrison said the budget is focused on boosting the economy and households, so that we live within our means and are able to return the budget to balance in 2020/21.

Below we highlight the small business areas that the Budget has targeted that will impact our clients.

Small Business Instant asset write-off extended for 12 months

The $20,000 instant asset write-off for small business will be extended by 12 months to 30 June 2018, for businesses with an aggregated annual turnover of less than $10m (currently it is only $2m).

Small businesses will be able to immediately deduct purchases of eligible depreciating assets costing less than $20,000 provided they are first used, or installed ready for use, by 30 June 2018. Only a few assets are ineligible (such as horticultural plants and in-house software).

From 1 July 2018, the immediate deductibility threshold, and the balance at which the pool can be immediately deducted, will revert to $1,000.

Small business CGT Concessions to be tightened

Access to the small business CGT concessions will be tightened from 1 July 2017 to deny eligibility for assets which are unrelated to the small business.

The concessions assist owners of small businesses by providing relief from CGT on assets related to their business which helps them to re-invest and grow, as well as contribute to their retirement savings through the sale of the business. However, some taxpayers are able to access these concessions for assets which are unrelated to their small business, for instance through arranging their affairs so that their ownership interests in larger businesses do not count towards the tests for determining eligibility for the concessions.

The small business CGT concessions will continue to be available to small business taxpayers with aggregated turnover of less than $2m or business assets of less than $6m.

Other Business Related Measures

  • The government will extend the taxable payments reporting system (TPRS) to contractors in the courier and cleaning industries. Businesses in these industries will be required to report payments they make to contractors from 1 July 2018, with the first annual report required in August 2019.
  • Businesses that employ foreign workers on certain skilled visas will be required to pay a levy that will provide revenue for a new Skilling Australians Fund from March 2018. The levy is dependent on whether the business turnover is under or over the $10m.

Here are the budget updates for GST and Superannuation and the updates for individuals.

If you have any enquiries regarding this, please do not hesitate to contact us.


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