Small business owners – Are you taking tax benefits of small business concessions?
31 July, 2022 BY Bibek Nepal, CPA

Small business owners – Are you taking tax benefits of small business concessions?

Small businesses can access a range of concessions. This applies to sole traders, partnerships, companies, or trusts.

According to ATO, to qualify for these concessions, you’ll need to determine if your business is a ‘Small Business Entity’ for the income year and review your eligibility each year.

If eligible, your business can access the following concessions:

  • Lower corporate tax rate of 25%
  • Small business income tax offset up to $1,000 if you are a small business sole trader or have a share of net small business income from a partnership or trust.
  • Immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use.
  • Immediate deductions for pre-paid expenses if the payment covers a period of 12 months or less that ends in the following income year.
  • Immediate deduction for certain start-up costs of a small business like professional, legal, and accounting advice, government fees and charges, etc.
  • Simplified trading stock rules to estimate the value of your trading stock at the end of the financial year to report in your tax return instead of conducting a physical stock take.
  • Small business capital gains tax (CGT) concessions to reduce, disregard or defer some or all of a capital gain from an active asset used in a small business.
  • Small business restructures rollover when restructuring your business without incurring an income tax liability.
  • FBT work-related devices exemption from FBT liability if you provide your employees with multiple work-related portable electronic devices that have similar functions and are used primarily for work such as laptops, tablets, calculators, mobile phones, etc.
  • FBT car parking exemption from FBT liability if you provide your employees with car parking benefits in some cases.
  • Small business superannuation clearing house to pay super guarantee contributions for your employees in a single electronic payment if you have 19 or fewer employees.
  • Reduced time limits of 2 years for reviewing your income tax assessment by ATO instead of standard 4 years.
  • PAYG instalment concession – pay PAYG tax by instalments worked out by the ATO and vary this amount each quarter if required.
  • GST instalment concession – pay GST by instalments worked out by ATO vary this amount each quarter if required.
  • Pay your GST on a cash basis i.e. no need to pay GST on sale to ATO until you receive payment for the sale.
  • Excise concession – Defer settlement of your excise duty and excise equivalent customs duty from a weekly to a monthly reporting cycle.

Get in touch with us today if you have any questions or need help accessing any of the small business concessions.


Disclaimer: This article is provided as general information only and does not consider your specific situation, objectives, or needs. It does not represent accounting or tax advice upon which any person may act. Implementation and suitability require a detailed analysis of your specific circumstances. Before taking any action, consider your own circumstances and seek professional advice.


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