Published on 18/10/2018 by Any Business.Com.Au

How will fast-tracked small business tax cuts affect you?

The Morrison government is fast-tracking a $29.8 billion tax cut for Australian small businesses which will see about three million employers benefit within three years rather than the initial plan of eight.

Announced recently, the cut is slated to be introduced into parliament soon and will reduce tax for businesses with less than $50 million in annual turnover from 27.5 cents on the dollar to 25 cents.

Small Business Owners

Under the plan, the small business tax rate will drop from 27.5% to 26% in 2020-21, and then 25% in 2021-22.

The government secured a deal in the Senate earlier this year to reduce the small business tax rate from 30% to 27.5%.

That deal included the same 27.5% to 25% cut, but it is scheduled to phase in by 2026-27, which means today's announcement will effectively bring forward the cut by five years.

A business with a profit of $300,000 can expect to save $7,500 in tax from 2021-22 under the plan.

Experts believe the tax cuts will enable small business owners to re-invest back into their own infrastructure, staff and/or marketing to continue the growth of their brands.

Sole Traders

Sole traders will also benefit from a fast-tracked tax cut which will see the headline rate for unincorporated small businesses fall to 16% by 2021-22, instead of 2026-27.

What are the chances this will actually go ahead?

The government had already legislated these tax cuts and it is just the timeframe that has changed.

Labor leader Bill Shorten has publicly left the door open to agreeing to bringing the changes in should his government be successful at this year's election, saying that they would keep an open mind on the small business tax cuts as they examine the numbers.

More good news ahead?

The Morrison government is considering a raft of other small business policies at the moment in the lead up to next year's election.

Minister for Small and Famiy Business Michaelia Cash has travelled across the country visiting businesses and with a view to simplifying regulation for small business.

She said the government wanted to reduce the amount of 'red tap' and introduce a one-stop-shop for small business when it comes to government departments.

AnyBusiness.com.au

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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