SMEs come out on top after budget
A nervous wait should have quickly turned to relief for SME owners around the country, with the latest Federal Budget showing signs of support in this area.
Among the changes are a welcome tax cut, new regulations surrounding asset write off and a promise to invest in Australia's infrastructure. As these changes are rolled out, SMEs can expect to see fewer compliance issues, with a focus on growth spelling good news for the affected companies.
What can SMEs look forward to?
One of the main positives to come out of the budget for these businesses is an overall reduction in company tax that specifically targets SMEs. The rate will be cut by 1.5 per cent, freeing up a significant amount of extra capital for SMEs.
Chartered Accountants of Australia and New Zealand believes that, while this is a start, further reductions are needed in the coming years to promote growth for SMEs.
"A cut to the general company tax rate is critical in ensuring Australian companies can compete on the international stage, where comparable OECD nations and regional neighbours typically benefit from lower tax rates," read a statement from the organisation.
The instant asset write off outlined in the budget is one the biggest changes to operation procedures for small businesses. SMEs that have annual turnover of less than $2 million can now immediately write off assets that are worth less than $20,000.
This should reduce the time and financial costs associated with compliance, while also encouraging spending for these businesses.
While you may be excited to make use of the new regulations, Chartered Accountants ANZ advises that businesses wait rather than rush. The tax break doesn't end until the end of June 2017, leaving plenty of time to get the most out of it.
"The income tax law has had these types of concessions before, although not as generous. Chartered Accountants know from experience that clients get the best outcomes when they take a little while to plan how best to respond," Tax Leader Michael Croker said.