It’s a new financial year and with it comes a series of tax breaks that should see small and family businesses left with more money in their pockets.
In October 2018 the government passed the Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill which brought forward a series of tax cuts for the nation’s 3.5 million small businesses from 2026 to 2021.
As of today, the first move towards the final implementation of these new tax breaks comes into play with incorporated small businesses with a turnover of less than $50 million now benefitting from the first rate cut.
These businesses will now see their company tax rate cut from 27.5 per cent to 26 per cent across the 2020-2021 financial year with a further final percentage drop to 25 per cent to kick in on July 1 2021.
Unincorporated businesses will also benefit, with the increase of the small business income tax offset from eight per cent to 13 per cent.
Speaking on the impact of the tax cuts, Minister for Employment, Skills, Small and Family Business, Michaelia Cash said the government is committed to reducing the impact of tax and red tape on small business.
“As we face the biggest economic challenge since the Great Depression, supporting our small and family businesses has never been more important. This tax relief will mean small business owners will have more money to reinvest in their businesses, their staff and their communities,” Cash said.
“These legislated tax cuts will provide further support to small business during COVID-19. The Morrison Government has delivered extensive support for small and medium-sized businesses during the crisis. We have extended the Instant Asset Write Off to $150,000 for another six months, are providing the Cash Flow Boost of up to $100,000 for employing small businesses, and are boosting access to capital through our COVID-19 SME Guarantee Scheme.”
Cash said the government is committed to boosting productivity and supporting the creation of jobs, “because we know that when small businesses prosper and grow, we all benefit”.
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