How the 2016 Federal Budget Affects Your Business

by | May 25, 2016

The Federal Budget has been relatively kind of late to small businesses with some significant initiatives being offered up. Here is a snapshot of some of the measures which may have a direct effect on your business. Of course with the Federal Election later this year, anything could happen so enjoy the benefits while they last.

Lower Tax Rate for Businesses Earning Less than $10 million

Last year the company tax rate of 28.5% was introduced to companies with a turnover of less than $2 million to be applied to the financial year ending 30 June 2016. Come July 2016, the threshold will increase from $2 million to $10 million and a lower tax rate applied. Note however the $2 million threshold will be retained for small businesses to access Capital Gains Tax (CGT) concessions. This policy change will affect about 870,000 businesses employing 3.4 million Australians.

The rate for the financial year ending June 2017 will be reduced to 27.5% for companies earning less than $10 million. Those opting for PAYG installments will benefit from the lower tax rate as of July 2016. This year’s budget aims to reduce the fiscal rate to 25% over the next decade. This lower rate will apply to businesses up to $25 million in turnover for 2017-18 rising to $100 million in 2019-2020. By 2020, more than one-half of all employees will be paying the lower tax rate of 27.5%.

Discounted Tax Rate for Sole Traders, Trusts and Partnerships

The federal government is intending to increase the discount applied to tax paid by sole traders, trusts and partnerships and starting from 30 June 2016, a discount of 8% will apply. This will be offered to businesses earning less than $5 million; a huge benefit for non-incorporated businesses. The discount will be increased to 16% in stages until 2026-27.

Deduction of Assets Less Than $20,000

You may already be familiar with the ruling for the deduction of assets worth less than $20,000 (excluding GST). Businesses earning less than $10 million will be able to also take advantage of this offer in the next financial year for assets purchased between 1 July 2016 and 30 June 2017. From 1 July 2017, the threshold will revert to the existing $1,000. Remember to plan your larger asset purchases accordingly.

Middle-Income Earners Tax Cuts

Tax cuts are also offered for middle-income earners bringing in less than $87,000 from 1 July 2016. The taxable income for those earning between $37,001 and $87,000 from 1 July will be 32.5%. This move by the Federal Government sees approximately half a million taxpayers fall from their previous tax bracket of 37%.

No Exemption on Imported Goods

At the moment, an exemption stands on all goods that are imported into the country with a value of less than $1,000. As of 1 July 2017, this exemption will be removed, and imports will face the same tax rate as goods purchased locally. Foreign suppliers will now need to factor in their GST obligations when selling products to Australian customers.

Additional Benefits to Employers Hiring Young Job Seekers

Cash bonuses are applicable for employers that offer internships and hire young job seekers – a win-win for small businesses across the country.

Updated Superannuation Laws

Small businesses will also need to ensure they are aware of the new superannuation laws and necessary updates brought about by SuperStream. They are not a guideline but a responsibility for all small business owners. The high-income earner superannuation adjustments will save $2.9 billion over the next four years.

Whether or not these are applicable to your business now, being aware of what you can aspire to as your business grows is important. Knowledge, as they say, is power.

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What our clients are saying...

I have had many a chat with Sophie on the networking circuit. Sophie has a strong profile and reputation within business circles and I wouldn’t hesitate to recommend her to any soho needing direction, support and encouragement. I have a passion for educating small business myself and wholeheartedly support Sophie in her endeavour to actively reduce costs for those who may be unintentionally making uninformed decisions relating to business management. Many business owners are unnecessarily outsourcing tasks which are misdirected or can be achieved inhouse.

Gai Hook
Virtual Sales Strategy

2017-10-13T09:32:05+00:00

Gai Hook
Virtual Sales Strategy

I have had many a chat with Sophie on the networking circuit. Sophie has a strong profile and reputation within business circles and I wouldn’t hesitate to recommend her to any soho needing direction, support and encouragement. I have a passion for educating small business myself and wholeheartedly support Sophie in her endeavour to actively reduce costs for those who may be unintentionally making uninformed decisions relating to business management. Many business owners are unnecessarily outsourcing tasks which are misdirected or can be achieved inhouse.
I’ve worked with Sophie as a contributor to Confessions of a Mumpreneur – a fantastic book that she dreamt up, edited and produced. Apart from producing fabulous books that help so many others realise their entrepreneurial dreams, Sophie is an astute business person who is making her mark on her own terms. Watch this space – I’m sure we’ll see and hear a lot more from Sophie Andrews in the years to come.

Jennifer Dalitz
Gender Diversity expert, Career Coach, Award winning blogger on women, work & leadership @ www.TheSheEOBlog.com

2017-10-13T09:50:01+00:00

Jennifer Dalitz
Gender Diversity expert, Career Coach, Award winning blogger on women, work & leadership @ www.TheSheEOBlog.com

I’ve worked with Sophie as a contributor to Confessions of a Mumpreneur – a fantastic book that she dreamt up, edited and produced. Apart from producing fabulous books that help so many others realise their entrepreneurial dreams, Sophie is an astute business person who is making her mark on her own terms. Watch this space – I’m sure we’ll see and hear a lot more from Sophie Andrews in the years to come.
I got to know Sophie through my previous employer where Sophie still handles the bookkeeping side of things. While we worked together I have found Sophie very accurate, punctual and very pleasant to work with. And recommend her highly.

Dianna Holwerda
Client Service Manager, John Sergeant Associates Pty Ltd

2017-10-13T09:55:05+00:00

Dianna Holwerda
Client Service Manager, John Sergeant Associates Pty Ltd

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I was recommended to The Accounts Studio at a networking event and have been working with them for the last 2 years. The team have all been very approachable and available – two things essential when it comes to understanding your accounts! I now no longer have the stress every three months of getting my BAS correct and even better I have a clear understanding of where my company is financially! Thanks Sophie and TAS team!

Eleni Mitakos
Galmatic Pty Ltd

2017-10-13T04:16:02+00:00

Eleni Mitakos
Galmatic Pty Ltd

I was recommended to The Accounts Studio at a networking event and have been working with them for the last 2 years. The team have all been very approachable and available – two things essential when it comes to understanding your accounts! I now no longer have the stress every three months of getting my BAS correct and even better I have a clear understanding of where my company is financially! Thanks Sophie and TAS team!
I have really enjoyed working with you guys and look forward to a successful 2013. From the moment we started with TAS I have seen value. The figures are accurate, you are accessible (and approachable!) and most of all – you are cool people!

Chris Du Plessis
Managing Director, Origin Meat Pty Ltd

2017-10-13T04:20:03+00:00

Chris Du Plessis
Managing Director, Origin Meat Pty Ltd

I have really enjoyed working with you guys and look forward to a successful 2013. From the moment we started with TAS I have seen value. The figures are accurate, you are accessible (and approachable!) and most of all – you are cool people!
"Sophie is so professional – careful, attentive and punctual – she has made managing my accounts not just easier, but a whole lot less stressful"

Fast Ed
TV Chef from Better Homes & Gardens

2017-10-13T04:23:15+00:00

Fast Ed
TV Chef from Better Homes & Gardens

"Sophie is so professional – careful, attentive and punctual – she has made managing my accounts not just easier, but a whole lot less stressful"
Sophie has been a tremendous support and guiding light for my business. I have continually succeeded when acting on her advice and by using her services. Her products are fantastic and her ideas and accuracy is out of this world. I would never hesitate to recommend Sophie’s services and I would invite anyone to contact me for a referral.

Belinda Grundy
GM, Property Styling Online and BG Property Styling

2017-10-13T09:21:50+00:00

Belinda Grundy
GM, Property Styling Online and BG Property Styling

Sophie has been a tremendous support and guiding light for my business. I have continually succeeded when acting on her advice and by using her services. Her products are fantastic and her ideas and accuracy is out of this world. I would never hesitate to recommend Sophie’s services and I would invite anyone to contact me for a referral.
Sophie has the spirit of the Entrepreneurial Business Owner! Whether she is running a successful single family website, creating a product for small business owners or running her own bookkeeping agency she is always right on track as to what small business needs. If you want to speak to someone who not only knows what business owners are going through-she also does something about it- then don’t miss out, connect with Sophie! She is someone who can not only think outside the square- she has true strategic thinking; which is often spoken about but is rarely truly placed into action.

Sue Heins
Councillor at Warringah Council

2017-10-13T09:25:16+00:00

Sue Heins
Councillor at Warringah Council

Sophie has the spirit of the Entrepreneurial Business Owner! Whether she is running a successful single family website, creating a product for small business owners or running her own bookkeeping agency she is always right on track as to what small business needs. If you want to speak to someone who not only knows what business owners are going through-she also does something about it- then don’t miss out, connect with Sophie! She is someone who can not only think outside the square- she has true strategic thinking; which is often spoken about but is rarely truly placed into action.
Sophie is an amazing business woman. She is able to take the complexities of business and break them into manageable pieces for small and home based business owners to work with. She’s clever, creative, supportive and very generous. She’s the reason that so many small businesses are doing so well. If yours is a small or home based business then Sophie is someone you need to know.

Anne Maybus
Writer and Content Creator, Clever Streak

2017-10-13T09:26:35+00:00

Anne Maybus
Writer and Content Creator, Clever Streak

Sophie is an amazing business woman. She is able to take the complexities of business and break them into manageable pieces for small and home based business owners to work with. She’s clever, creative, supportive and very generous. She’s the reason that so many small businesses are doing so well. If yours is a small or home based business then Sophie is someone you need to know.
Sophie is efficient, direct and gets the job done. She responds quickly, keeps me updated and has a way of simplifying things and making my life easier. She is all about efficiency and that’s what makes it great to work with her, I highly recommend her to anyone who wants someone to efficiently look after their books and she is great value for money too.

Adam Dobson
Strategic Resourcing Manager

2017-10-13T09:28:24+00:00

Adam Dobson
Strategic Resourcing Manager

Sophie is efficient, direct and gets the job done. She responds quickly, keeps me updated and has a way of simplifying things and making my life easier. She is all about efficiency and that’s what makes it great to work with her, I highly recommend her to anyone who wants someone to efficiently look after their books and she is great value for money too.