IS YOUR BUSINESS A “SMALL BUSINESS” ENTITY?

Small businesses can access a range of tax concessions from the ATO. To qualify as a “Small Business Entity”, the business must have:

  • an aggregated turnover (your annual turnover plus the annual turnover of any business connected / affiliated with you) of less than $10 million; and 
  • be operating a business for all or part of the 2022 year.

TEMPORARY FULL EXPENSING FOR ASSET PURCHASES

This one applies not only to small business entities, but also those businesses with an aggregated turnover of less than $5 billion.  A business can immediately deduct the business portion of the cost of eligible new depreciating assets.

For businesses with an aggregated turnover of less than $50 million, temporary full expensing also applies to the business portion of eligible second-hand depreciating assets.

It is important to ensure you buy these assets and use them or have them ready for use before 30 June 2022 to qualify for a 2022 tax deduction.

SMALL BUSINESS CONCESSIONS – PREPAYMENTS

“Small Business Concession” taxpayers can make prepayments (up to 12 months) on expenses (e.g. loan interest, rent, subscriptions) BEFORE 30 June 2022 and obtain a full tax deduction in the 2022 financial year. 

YEAR-END STOCKTAKE / WORK IN PROGRESS

If you are a small business entity, you may be able to take advantage of the ATO’s simplified trading stock rules.  These rules are available if you estimate that the value of your trading stock change by less than $5,000 in the year.

If you use the simplified rules, you don’t have to:

  • conduct a formal stocktake at year end
  • account for the changes in your trading stock’s value.