Justine DaviesWith a number of new resources and tax laws introduced in the past year for small and medium enterprises (SMEs), finance expert Justine Davies has partnered with Officeworks to help SMEs take the stress out of tax time and identify opportunities to minimise your business tax bill.

Federal Budget Small Business Initiatives

The government is keen to boost small business investment and growth, having introduced several new measures to facilitate this:

·         Companies with a turnover of less than $2,000,000 will receive a tax cut, from 30% down to 28.5%

·         Small businesses not incorporated as a company will receive a 5% tax discount of up to $1,000 a year

·         Small business can claim an immediate tax deduction for each and every item they purchase up to $20,000. The incentive is available for two years however the change still needs to pass through the Senate

After-hours web chat pilot for small business

It can be difficult to set aside time to talk with the tax office during business hours – which is why the ATO’s new after-hours live web chat service for small business owners can be very useful. Visit www.sba.ato.gov.au for more information.

The repeal of the Minerals Resource Rent Tax (MRRT)

With the repeal of the Minerals Resource Rent Tax, various small business tax benefits that were tied to the MRRT were also repealed. These benefits included a reduction in the instant asset write-off and abolition of accelerated depreciation for motor vehicles. Business owners should contact the ATO for further information.

New small business newsroom

In late 2014, the tax office launched an online small business newsroom, to help time-poor business owners locate the latest tax news as quickly and easily as possible. You can check out the newsroom here.

Superannuation rates increased

From 1 July 2014 the super guarantee rate increased from 9.25% to 9.5%. It will remain here until July 2018.

PAYG withholding changes

As of 1 July 2014, the introduction of the Temporary Budget Repair levy means employers are required to withhold an additional 2% of tax from employees earning more than $180,000 annually. The Temporary Budget Repair levy has also increased the fringe benefits tax temporarily to 49% from 1 April 2015.

Tax File Numbers (TFN) and Australian Business Number (ABN) withholding rate

From 1 July, the tax withholding rate has temporarily increased to 49% for employers paying staff without a TFN. Likewise for SMEs paying invoices without an ABN quoted, the withholding rate has temporarily increased to 49% as of 1 July 2014.