This content is under review and will be transferred to the Department of Industry, Science, Energy and Resources as a result of the Administrative Arrangements Order made on 5 December 2019 with effect from 1 February 2020.

Tax relief and assistance

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The Australian Government is providing tax relief for small businesses. Lower taxes mean more money for small business owners to reinvest into their business, create more jobs for Australians, and continue to contribute to the Australian economy.

Tax concessions

The Government has fast tracked tax relief for small and medium-sized businesses. The tax rate for eligible companies with aggregated annual turnover below $50 million will fall from 27.5 per cent to 26 per cent in 2020–21 and to 25 per cent in 2021–22.

Unincorporated businesses with aggregated annual turnover below $5 million will benefit from an increase in the unincorporated small business tax discount rate. The discount rate will increase from 8 per cent currently to 13 per cent in 2020–21 and to 16 per cent in 2021–22 (up to the existing cap of $1,000).

For more information visit the australian Taxation Office website at the followng pages: Changes to company tax rates and Concessions at a glance

Immediate deductions for small businesses

The Government is helping businesses invest and grow through the instant asset write-off.

The Government understands how important the instant asset write-off is for small business and has increased the threshold to $30,000 and expanded access to medium-sized businesses with an annual turnover of less than $50 million, until 30 June 2020.

The threshold applies on a per asset basis, so eligible businesses can instantly write-off multiple assets.

The Government’s changes ensure that more businesses continue to benefit from the instant asset write-off as they grow, supporting them to invest in assets and build their business.

For more information on this measure and other small business tax concessions, visit the Australian Taxation Office website at the following pages: 

Simplifying Business Activity Statement (BAS) reporting requirements

The Australian Taxation Office (ATO) has developed a simpler BAS solution to deliver small businesses time and cost savings associated with GST bookkeeping and reporting.

The two components of Simpler BAS are:

  1. Simpler BAS reporting – reduces the number of GST questions on the BAS to only three and removes the requirement for a 20 question worksheet, and
  2. Digital bookkeeping solution – option for small business to take up changes to their accounting software to reduce the average number of complex GST classifications from 8–9 down to a simple ‘GST’ or ‘No GST’.

Eligible small businesses were automatically transitioned to Simpler BAS reporting from 1 July 2017, which has helped save small business owners’ time and money. The ATO is continuing to work with Digital Service Providers to maximise the take-up of the Simpler BAS digital bookkeeping solution.

For more information visit the Australian Taxation Office website.

Tax incentive for early stage investors

To make a success of start-ups, small business needs investment. The Government provides tax incentives encouraging early-stage investment in innovative start-ups to boost capital in new enterprises and promote new business ideas.

Eligible investors in qualifying early-stage innovation companies can claim a 20 per cent carry-forward, non-refundable tax offset for their investment. This is capped at a total offset amount of $200,000 for an investor and their affiliates each year, and there is a 10-year capital gains tax exemption on their investment, provided eligible investments are held for at least 12 months.

For more information visit the Australian Taxation Office website.

Tax dispute resolution and advice

The Government has introduced an easier, cheaper and quicker process for small businesses to resolve tax disputes with the Australian Taxation Office (ATO). Together, these initiatives will help ensure a level playing field for those small businesses that dispute an ATO decision.

Small Business Taxation Division

The Small Business Taxation Division within the Administrative Appeals Tribunal (AAT) provides a fast-tracked appeals process for small businesses, with decisions handed down within 28 days of a hearing. The application fee has been reduced to a rate of $500 and if the ATO appeals the AAT decision to the Federal Court it will pay the small business’ reasonable legal costs.

For more information visit the Administrative Appeals Tribunal website. 

Small Business Concierge Service

The Government has also established a new Small Business Concierge Service within the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) office to provide support and advice on the AAT process.

  • Before applying to the AAT, unrepresented small businesses can receive one hour of legal advice on co-payment of $100. After applying to the AAT, the small business may receive an additional hour of free legal advice, administered by the ASBFEO.
  • The ATO uses its own officers to run these matters except in exceptional circumstances. Where the ATO does engage legal counsel in the AAT and the small business does not have legal representation, the ATO will cover the cost of providing the small business with equivalent legal representation.

National Tax Clinic program

The National Tax Clinic program is a government-funded initiative to help people who may not be able to afford professional advice and representation with their tax affairs.

The program is available to eligible individuals, small businesses, not-for-profit organisations and charities.

Ten universities across Australia have been funded to run the program which means there are tax clinics in every state and territory.

For more information visit the Australian Taxation Office website.

Additional tax information and support

The Australian Taxation Office has a range of avenues for small business operators to seek further information and support.