Who are the big winners from the 2016 Budget?
Many commentators described the 2016 budget released earlier this week as bland or even “boring” with not much in it to make anyone too happy or even too miserable. But there was one group which emerged as one of the clear winners going forward. Small business owners will be a pretty happy bunch come 1st July.
Until now, small businesses were categorised as those with an annual turnover of less than $2m, but from 1 July this year, the category has been redefined to include businesses with a turnover of up to $10m, meaning that an additional 60,000 businesses, employing around 1.5 million people, will be able to take advantage of deductions.
In total, 870,000 businesses will enjoy a tax cut from 28.5% to 27.5%. For new entries into the category, that equates to a 2.5% deduction in their tax rate, which is enough to make any small business smile.
Coupled with the obvious financial benefits, the government has announced simplified methods for paying PAYG instalments, so it's definitely a good time to be an SME.
"Get spending, because it's a great opportunity to update or upgrade your equipment as you grow your business."
But the news gets better for those in the $2m-$10m bracket, as they are eligible for the instant tax deduction for business purchases up the value of $20,000, which was introduced by the Government last year to stimulate spending. Smaller companies of up to $2m turnover have enjoyed this benefit since 2015.
The offer expires on 30 June 2017 - so get spending, because it's a great opportunity to update or upgrade your equipment as you grow your business.
Don’t look a gift horse in the mouth
With every gift though, there comes a serious side, and for businesses about to spend up and take advantage of the $20,000 offer, ensure you are considering the insurance implications of your purchase and updating your business insurance accordingly.
"As EOFY approaches, a good habit to get into is checking your insurance policies to make sure you don't end up underinsured."
If you forget to add your new asset to your policy, you could find the policy won't pay out when you go to make a claim, and that it was not insured at all, which really would take the shine off your windfall.
As the end of the financial year approaches, a good habit to get into is checking over all your insurance policies to make sure they're up to date and that you aren’t underinsured.
Knightcorp can help to revise the cover you have, identify where you may be able to combine policies to save on premiums, and help you to with revised valuations and obtaining the best policy for your needs.