The Federal Treasurer, Mr Joe Hockey, handed down the Commonwealth Government's 2015/16 budget on Tuesday, 12 May 2015.

Small businesses with aggregated annual turnovers of less than $2,000,000 received special attention in this year's budget.

Highlights for small business owners:

  • 1.5% cut in the company tax rate, down to 28.5% from 1 July 2015
  • 5% tax discount for unincorporated small businesses, capped at $1,000 per individual per year
  • Immediate write-off of the cost of assets bought and first used in the business, or installed ready for use, between 12 May 2015 and 30 June 2017, subject to a cap of $20,000 per asset. This measure applies to both new and second-hand assets but does not apply to acquisitions of horticultural plants, primary production assets, software created in-house, capital building works or assets leased out to another party (including super funds)
  • Capital Gains Tax rollover relief for changing the legal structure of the business from 1 July 2016 (e.g. CGT will no longer be payable if changing from say a trust structure to a company structure)
  • Fringe Benefits Tax exemption if providing employees with more than one work-related electronic device, even where the devices provide similar functions (e.g. a tablet device and a laptop). Currently the devices have to provide substantially different functions to qualify. The exemption is to apply from 1 April 2016.

Measure for start-up businesses:

  • Introduction of an immediate write-off for start-up expenses, including for legal and accounting advice and establishment costs paid to professional services providers

Work-related car expenses:

  • From 1 July 2015, there will only be two acceptable methods for claiming motor vehicle expenses for work-related travel through your personal income tax return. Claims will be accepted using a rate of 66 cents/km up to 5,000km, regardless of the size of the vehicle. Alternatively, calculation based on actual expenses multiplied by a business usage percentage determined by keeping a detailed logbook will also be acceptable. The one-third of operating expenses and 12% of vehicle cost methods will no longer available.

  • This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2014 Moore Stephens Australia Pty Limited. All rights reserved.