Small business tax cuts for the new financial year
If you’re running a small business, you might be eligible for some tax cuts that came into effect at the start of the new financial year on July 1. These tax cuts are:
· an increase in the small business tax offset, and
· a drop in the company tax rate.
Small business tax offset
If your small business has a sole trader, partnership or trust structure, the small business tax offset rate has increased from 8% to 13% from July 1, up to a maximum offset of $1,000. A tax offset reduces the amount of tax you pay.
To be eligible for the small business tax offset, your annual turnover must be less than $5 million per year. You don’t need to claim the offset. It will be automatically calculated for you by the Australian Taxation Office when you submit your tax return for the 2020/2021 financial year.
Company tax rate
If your small business is a company and you have an annual turnover less than $50 million, your company tax rate has dropped from 27.5% to 26% from July 1 this year.
These tax measures are in addition to other measures to help Australian businesses to cope with the economic impact of the coronavirus restrictions:
· an increase in the instant asset write-off scheme.
· tax-free cash flow boosts of up to $100,000 if your business employs staff.
How we can help
At Scorpion Bookkeeping, we can provide you with bookkeeping support services to help you run your business. We currently provide bookkeeping support services to a diverse range of clients in South Australia, Victoria and New South Wales.
We can also help you to implement Xero bookkeeping software to help you. We are a Xero-certified partner.
Contact us today for a free, no-obligation consultation to find out how we can help your business!