The 2017/18 Federal Budget has a number of initiatives targeted towards small business owners. Business owners need be aware of the proposed and upcoming changes and the potential impact they have on their small business.If you are concerned about the impact of these changes or would like legal guidance regarding your business, get in touch with our experienced business lawyers.

2017/2018 Federal Budget: A Guide for Small Business

Extension of the $20,000 write-down of depreciable assets

The Federal Government announced an extension to the $20,000 write-down of depreciable assets for small businesses, originally introduced in the 2016/17 Budget. This scheme was intended to end 30 June 2017 but has been extended until 30 June 2018, allowing small business owners the opportunity to continue to take advantage of this incentive. The turnover threshold to which the write-down applies to has increased to $10 million, five-times higher than the threshold introduced in the 2016/17 budget.

Changes to Small Business Capital Gains Concessions (CGT)

From 1 July 2017 the Federal Government will limit access to small business CGT concessions. The aim of this is to ensure that the concessions can only be accessed in relation to assets used in a small business or ownership interests in a small business. These changes will continue to ensure that the concession is still available to small business with either an aggregated turnover of less than $2 million; or total business assets valued at less than $6 million. Small business owners should be aware of these changes to the CGT concession and account for them accordingly.

Commitment to the Ten Year Enterprise Tax Plan

The Federal Government has reaffirmed it will continue to reduce the tax rate for small businesses. The tax rate was reduced to 27.5% for the financial year 2016/2017, They have committed to reducing the corporate tax rate to 25% for companies with an aggregated turnover of less than $50 million by 2026-27 turnover remains one of the key long-term objectives.

Innovation and FinTech

An initiative in this Budget includes issuing draft legislation to extend crowd-sourced equity funding. Other initiatives introduced include a legislative financial service regulatory sandbox to enable new and innovative FinTech products and services to be tested in Australia.

The Bank Levy

Small business owners must be aware that the introduction of the 0.06% annual levy to banks with liabilities (debts) over $100 Billion. This levy will affect the big four banks, which may result in costs from this levy being passed onto customers and potentially impacting the bottom line of small businesses.

Investing in Infrastructure

The 2017/18 budget has placed a large focus on infrastructure spending by spending $50 Billion between 2013/14 to 2019/20 in order to achieve a number of large infrastructure projects across Australia. Business owners should be aware of these initiatives as it can provide valuable opportunities for small businesses. Whether it be in the delivery of these large infrastructure projects or the impact that more efficient transport systems will have on small businesses productivity. For any small or large scale construction projects, LawPath can connect you with Australia’s leading construction lawyers.

Let us know your thoughts on the 2017/2018 Federal Budget Small Business Takeaways by tagging us #lawpath or @lawpath.

Daniel Saouma

Daniel is a Legal Intern at LawPath working with the content team. With a interest in consumer and media law he has completed a Bachelor of Business degree majoring in Marketing and is currently completing his law degree at the University of Technology Sydney.