Small Business Owners – Tax Concessions Key (2016-17)

Tax planning is a step that can help boost savings. This step holds more importance for small business owners and individual traders who have limited funds. The laws have been made to facilitate tax savings and various concessions are deductions are available for the businessmen. However, the sad part is that most of the people are not aware of these available reliefs.

So, in order to help, we have listed some important concessions that would affect the return of 2017 of small business owners.

  • Small business:
  1. $20000 immediate write off by 30 June: if you are looking out for expansion by purchasing of new capital assets for your business, then now is the right time to do so. The new federal budget proposed an extension to tax concession. This amendment provides a benefit to the small businesses to avail an immediate deduction for assets below $20000, they purchase before 30th June. This is only applicable to the assets which are in a form that they can be immediately put to use in business.


  1. Increase in turnover threshold: the new laws have increased the threshold limit for small businesses from $2 million to $ 10 million for the financial year. This limit is a collective limit for those businesses that own subsidiaries or have connected affiliates. This means, if a person owns a business which has 4 other connected business, then the threshold limit for turnover will be seen as a collective limit.


This is mainly useful for small business houses as now they can expand without worrying about losing the tax benefits.


  1. Immediate deduction for prepaid expenses: prepaid expenses can be defined as those expenses which have been occurred but their benefit has not yet been realized. They are paid for the future. Now, the small businesses have the advantage of availing an immediate deduction for these prepaid expenses.

For example, suppose John paid the rent for the entire year on may 2016. Now the benefit that will be available post the end of the financial year 2016-17 will be prepaid expense for the current year and as per new amendments, John can claim a deduction for the entire amount in this financial year itself.

This will lead to a lesser taxable income and thus help in tax saving.


  1. Immediate deductions for start-up costs: if you are planning for starting a new venture, the new amendments allow you to claim an immediate deduction for the fees and other costs involved. Now is the right time for you to procure the best services and professional advice. Do visit MaxMargin Accountants to benefit from their professional expertise and at the same time, you can avail a tax benefit for this. Isn’t it like a dream come true?Simplified stock exchange trading rules: To help the small businesses escape the red-tape and bureaucratic systems, the ATO no longer requires the small businesses to conduct a stock-take if the change in the value of the stocks from 1st July 2016 to 30 June 2017 has not exceeded $5000. They are allowed to use a reasonable estimate instead. The businessmen can gain more information about this on

    Reduction in tax rates for companies: with effect from 1st July 2017, the government has brought a relief of 1% fall in the company tax rate for small business. The tax rate which was earlier 28.5% has now been reduced to 27.5%. This will help boost the savings of small businessmen and they can utilize this money for expansion or other business activities.

    Business restructuring reforms: from 1st July 2016, a small business entity is allowed to transfer its capital assets to another eligible entity without attracting a capital gains tax. This provision is applicable only for those active assets which come under the purview of capital gains tax, including goodwill, premise or other revenue and depreciating assets. With the help of this reform, the business owners have the option of restructuring their business and strategies.

    Fringe benefits for employees: now with the tax amendments, small businesses have the option of providing their employees with multiple incentive devices. Prior to 2017, businesses could use only one device under the fringe benefits tax exemption. The fringe benefit devices can be in the form of laptops, mobile phones, laptops or any other thing. As a result of this reform, more and more businesses can provide their employees’ benefits to motivate them to work better. The best part is that they can do all this without attracting a tax liability.


  • Individuals
     Increase in tax threshold: there has been an increase in tax threshold from $80000 to $87000. With this, the individuals can save tax as now the marginal rate of 37% applies to the increased amount. Income saving is now easier! Superannuation: some major changes have been made to the superannuation system which is affecting individuals and self-managed superannuation funds.


2016/2017 Superannuation Concessional Contributions Caps

$30,000 for individuals under age 50 and

$35,000 for those aged 50 and over


What are contribution caps?

Contribution caps are the limits to the funds which can be contributed for a member in each financial year. Additional tax liability may arise for a member if the contribution exceeds the cap limit.

From 1 July 2017, the concessional contributions cap is $25,000 for everyone, regardless of age.


2016/2017 Superannuation Non-concessional Contributions Caps

Non- concessional contributions cap is $180,000. However, from July 1, 2017, this concessional cap limit will be reduced to $100000 per year. This will remain available to individuals aged between 65 and 74 years if they meet the work test.

From 1 July 2017, non-concessional caps will be nil if the individuals have a total superannuation balance greater than or equal to $1.6 million.

Point to be noted: the total superannuation balance is determined on 30 June of the previous financial year.


 Unable to understand? No worries:

If you are unable to understand any provisions or wish to seek professional guidance, then you can call us 1300 886 514 or email our account manager to make a booking now. Plan your tax wisely with the help of our experts.

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