Small business initiatives in the Federal Budget

The Federal Government announced many small business initiatives in last week’s Federal Budget.The small business company tax rate will be reduced to 27.5% and will be available to all small companies with an annual turnover of less than $10 million from 1 July 2016. The government plans to progressively reduce the tax rate to 25% by 1 July 2026.The unincorporated tax discount will be increased from 5% to 8% from 1 July 2016. After the initial increase, the discount will be progressively increased to a final discount rate of 16% from 1 July 2026.The unincorporated tax discount will be limited to small businesses with turnover of less than $5 million and remains capped at $1,000 per individual per year.The Government has also announced that it will implement changes to simplify BAS reporting requirements from 1 July 2017. A trial of the new simpler reporting arrangements will commence on 1 July 2016.