In the May 2015 budget, certain tax changes for small business were mentioned that might make an impact on creative businesses as well. Matthew Carter, one of the groovy accountants, goes through these changes in a little more detail.
SMALL BUSINESS TAX WRITE-OFF ACCELERATED DEPRECIATION
Small businesses will get an immediate tax deduction for any individual assets they buy costing less than $20,000. (Currently, the threshold sits at $1,000). A small business is has less than $2m income and an ABN.
Businesses can buy any machinery or equipment related to their business if each item is valued at less than $20,000. You can claim the full amount from your income to reduce your tax bill. There is no limit on the number of items a business can claim. It does not apply to stock, horticultural plants or in-house software.
These arrangements start from Budget night and continue until the end of June 2017.
Note this is a proposed law change, and has not yet passed through parliament. It is advisable to wait until this has parliament passes the law to effect these changes, which is currently expected to be the middle of June 2015.
The Government is reducing the tax rate for incorporated businesses with annual turnover less than $2 million. The company tax rate for these businesses will be reduced by 1.5 percentage points to 28.5 per cent from 1 July 2015.
The Government will also provide a 5 per cent tax discount to unincorporated businesses with annual turnover less than $2 million from 1 July 2015, capped at $1,000 per year per individual.
The government confirmed it will impose the goods and services tax on Netflix and other offshore-based streaming companies and suppliers, but not until July 1 2017.
FUNDING CUTS – SCREEN AUSTRALIA and THE AUSTRALIA COUNCIL
Screen Australia will be forced to cut its funding programs after the federal budget reduced its allocation by $3.6 million over the next four years. Screen Australia have stated that the cuts will be applied across the board, partly in response to market needs, but will not target any specific programs, unlike last year when documentary funding was reduced. “Funds will continue to be allocated against our primary filters of quality, culture and innovation,” said a spokeswoman.
The Australia Council will also lose $104.8 million over four years, and the money will be used to create a new ‘slush fund’, which at this stage seems to be used at the discretion of the Arts Minister of the day. The funding cuts total $29 million in the coming year, a cut of 16 per cent for the Australia Council on 2014’s appropriation.
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