Number crunching is the favourite pastime of few but if you’re in business, interested in business or ready to take it on yourself, it’s worth getting your head around the Government’s unveiling of their new 2016 budget plans.
Not sure where to start? We’ve done the maths for you.
What does the 2016 Federal budget mean for my small business?
Every little bit helps, business owners. Under this year’s budget, small business owners will enjoy at 27.5 per cent tax rate, down from last year’s 28.5 per cent, and now encompasses business that earn under $10 million, which currently incorporates around 870,000 Australian businesses. There’s also the extension of instant tax deductions for business equipment under $20,000 for businesses with less than a $10 million turnover until 30 June, 2017.
What about big business?
It’s not just small businesses that will get a tax cut. If you’re a business that falls into the ‘under $10 million turnover’ bracket, you’ll be getting a reduced tax rate of 25 per cent. If your businesses earns over that, you’ll get it too (but you’ll have to wait a while). Incrementally, the turnover threshold will increase and tax rates will reduce, culminating in a 25 per cent tax rate for all Australian businesses by 2026-27.
Any breaks for entrepreneurs should be aware of?
1. The “explore being my own boss concept”
This is an $88.6 million dollar funding mission to educate young people into starting their own businesses with workshops, information packs and additional support for youth in high unemployment areas shows that the Government is interested in fostering an alternative to university for young people. The upshot? The Government gets how important helping people start their own businesses is.
2. Access to subsidised employees
In addition, the Young Jobs PaTH (Prepare, Trial, Hire) program is not only is aimed at boosting job readiness for vulnerable young people under the age of 25, it’s worth a shot if you’ve already established a business too.
From April next year, young people will be able to register for “intensive pre-employment skills training” which aims to prepare them for a job and place them in an internship for up to 25 hours a week between one to three months. They’ll also get $200 a fortnight for their trouble in addition to welfare benefits. Here’s where it’s good for start-ups: blooming businesses can apply to take on these subsidised employees. You’ll be supporting your own and upcoming business ventures in the process.
3. Tax offset for investors in ‘innovative’ businesses
Encouraging investment in new businesses, the Government will offer a 20% tax offset and a 10-year exemption from capital gains tax on investments for eligible “innovation companies”. There’s also a reduction time in the holiday period (the length of time you must hold onto your investment) from three years to 12 months.