Encouragement for new business

Encouragement for new business

The Federal Government has set its sights firmly on encouraging new businesses in Australia with a number of measures aimed at simplifying their administrative processes and providing greater financial assistance.

There were a number of new initiatives unveiled as part of Tuesday’s Budget announcement.

The Government announced a more streamlined business registration process which should make it easier to start a new business.

Legal and accounting services can be significant costs for businesses that are setting up. New businesses can now immediately claim these costs as tax deductions in full.

The Government has also announced support of crowd-sourcing schemes, helping large numbers of investors to make small investments in private companies. While the full details of this support are to be released, this initiative looks promising for start-ups and the entrepreneur community.

To reduce start-ups’ salary expenses many business owners offer employees a package that includes base salary and company shares. The Government have announced there will be change to the taxation of employee share schemes, to help start-ups attract and retain talent. 

From 7:30pm on 12 May 2015 (the time of the budget announcement) until 30 June 2017, small businesses can claim an immediate tax deduction for “each and every item” purchased up to the value of $20,000, rather than having to claim those purchases as deductions spread over several years. Prior this announcement, the threshold sat at $1,000.

For businesses that are incorporated, the corporate tax rate will drop from 30 per cent to 28.5 per cent. Small businesses that are unincorporated will also receive a 5 per cent discount on income tax on business income up to a $1,000 per individual.

In what has been widely viewed as a positive budget for small business, the downstream benefits of these initiatives have the potential to stimulate growth more broadly throughout the Australian economy.

Find out more about the Federal Budget 2015

Important information: this article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.