2 Changes for Business Tax in the New FY That You Need to Know About

Each new financial year, there will be changes introduced by the Australian Tax Office that affect individuals and businesses in many different ways. Last year, there were a whole host of changes that caused a bit of chaos – thankfully, settled down now and all under control. In the next few weeks however, there are some more changes coming – from July 1 – and while there aren’t many, they will be quite significant for businesses at a certain growth stage.

The definition of small business (in terms of revenue) has changed, and the company tax rate has gone down for small businesses – which for most businesses, is good news! As part of the Enterprise Tax Plan 2016, the ATO outlines the following:

“The corporate tax rate is reduced from 28.5% to 27.5% for the 2016–17 income year for small business entities. The aggregated turnover threshold to qualify as a small business has been increased from $2 million to $10 million. In 2017–18 the threshold increases from $10 million to $25 million and in 2018–19 to $50 million. From 2017–18, corporate entities eligible for the lower tax rate will be known as base rate entities, i.e. the small business definition will remain at $10 million from 2017–18 onwards while the base rate entity threshold will continue to rise.” For more information, visit the full notice here. If you’d like to setup a time to chat – email [email protected] today