Small Business Tax

Two Measures to Assist Small Business During GFC
These measures will apply to any business that has an annual income below two million dollars:

  1. For small businesses that have a BAS debt, you have the option of contacting and arranging with the ATO for the General Interest Charge (GIC) free payment program. The GIC free payment is good until 30 June 2010.
  2. If a small business pays the BAS on a quarterly or annual basis the BAS payment due date allows a two-month deferment. It is limited to one month, if the BAS is paid monthly. During the deferment, there will be no interest charged, however you will still be required to lodge your BAS on time.

General Business and Small Business Tax Break
A general business tax break for small businesses with an annual income of less than two million dollars applies to the purchase of new depreciating assets or existing assets that are improved by 31 December 2009. The depreciation deduction has been increased from 30% to 50%. The assets must be used or installed and ready for use by 31 December 2010 and cost $1,000 or more. The deduction over the life of the asset would be 150% of its purchase price under these new guidelines. You can claim 50% of the purchase price on your tax return in the year the asset was placed in service, if you are eligible.

A 10% tax deduction would apply for businesses that have over two million dollars in annual revenue.

Research & Development
Starting in 2010-11, the Research & Development (R&D) Tax Concession will become the R&D Tax Credit System. Under the new, more simplified tax credit system, businesses that have less than twenty million in annual revenues, there is a 45% refundable credit of your R&D expenditure. The credit is applied when you file your tax return and also small companies that have shown a loss can take advantage of the refundable credit. This means unlimited levels of R&D expenditures. With a tax concession of 150%, the new R&D Tax Credit System is more attractive than the R&D Tax Concession. You can still realise a tax concession of 133% if your business revenue is greater than twenty million dollars because you are entitled to a 40% non-refundable credit under the new system.