Whether you are just starting out in business or have a well established enterprise, business tax concessions and deductions can have huge impact on a business’s bottom line:
– are you operating through the right business structure?
– are you utilising all the tax concessions available for small businesses?
– have you considered the issues around employing staff?
Businesses can operate through the following structures:
-sole trader
– company
– trust
– partnership
Each one of the above has its advantages and limitations, which need to be evaluated in conjunction with your particular circumstances and business and personal goals. Structures can change and should be reviewed annually.
From 1 july 2012 the following business tax concessions are available to businesses which turnover $2 million or less:
– higher depreciation rates
– $5,000 upfront deduction for purchases of motor vehicles ( including motor bikes and vans)
– immediate deduction for assets under $6,500
– GST on a cash basis
– prepaid expenses deductible in full (e.g. insurance)
– trading stock movements under $5,000 do not need to be accounted for
Lastly, when considering employing staff, it is important to distinguish between employees and contractors. The common trap is that contractors may fall into the definition of employees for the purposes of payroll tax and fringe benefits legislation, which may result in additional compliance and tax payable. There is also far greater compliance requirements associated with paying wages as compared to contractors.
Want to maximise your business tax concession? Contact Rubiix tax accountants today!