3 February 2020
The Government has released the Board of Taxation’s report into the concessions that are available to small business. The report contains a number of recommendations aimed at improving the tax landscape for small business taxpayers.
The major recommendation by the Board is the simplification of the definition of ‘small business entity’ so that a $10 million turnover threshold would apply across all tax concessions for small business (i.e., adjusting the different thresholds that currently apply to the CGT concessions and small business tax offset). In conjunction with this recommendation, the Board proposes significant changes to the small business CGT concessions including the removal of the $6m maximum net asset value test and combining the four different CGT concessions into one exemption with a lifetime cap.
The Board also recommends either replacing the small business tax offset with a different concession or increasing the cap on the offset to make it a more meaningful concession.
The review also contains a number of other recommendations aimed at simplifying the concessions, expanding access to some concessions and removing others. These include:
- Re-introducing the loss carry back rules for small business companies;
- Increasing access to the instant asset write-off for entities not using the pooling rules;
- Apply one rate (30%) to small business general pools;
- Repealing the simplified trading stock provisions; and
- Allowing small businesses to calculate PAYG obligations using real-time figures.
A consistent theme by the Board’s review was the complexity of the concessions available and the wide range of eligibility requirements. Review submissions received pointed to the difficulty of applying the small business CGT concessions in practice and the need for SMEs to engage high-cost specialist advice. Simplifying these rules was therefore a key focus.
It will be interesting to see how many of the Board’s proposals are adopted by the Government. We’ll keep you informed when changes are announced.
Contact the team at Shakespeare on 08 9321 2111 if you’d like to discuss how this may apply to your individual circumstances.
Source: KnowldgeShop February 2020 Tax Round-up
General disclaimer: Our firm provides the information on this website for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles on this website are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose
Recent Comments