There are no major tax changes in respect of the 2010/11 year as it affects SMEs.
A summary of the matters included in the budget, Henry Review and Government Initiatives which have already started in 2010 include:
Medical expenses offset threshold
The threshold of $1,500 applicable under the medical expenses rebate rules will be increased to $2,000 from 1 July 2010, and then indexed annually.
Research And Development The government has indicated that the new Research and Development Tax Credit scheme will commence from the 1 July 2010. The legislation (which has yet to be passed by the Senate) will provide for a rebate for eligible R & D expenditure at 45% of the R & D expenditure for companies with turnovers under $20M and at a rate of 40% for companies with turnovers over $20M.
If companies with turnovers under $20M are trading at a loss, the Company can elect for the Australian Taxation Office to pay a rebate, calculated at 45% of Research and Development expenditure for the year, directly into the Company’s bank account within 30 days of the tax return having been lodged.
Naturally, the Company’s carried forward losses will be adjusted following the payment of the rebate.
Small Business
Small businesses that account for GST on a cash basis will be allowed to claim input tax credits upfront in relation to Hire Purchase agreements.
Commercialisation Australia Grant Programme
Commercialisation Australia Grant programme for businesses that have developed new products, processes or services that meet the merit criteria have grants available for
• Skills and Knowledge
• Experienced Executive
• Proof of Concept
• Early Stage Commercialisation Repayable Grants
Maximum Grants available are:
| Skills and Knowledge | $50,000 | 80% grant |
| Experienced Executives | Grants of up to $100,000 per annum for 2 years | 50% grant |
| Proof of Concept | Grants from $50,000 to $250,000 | 50% Grant |
| Early Stage Commercialisation Repayable Grants | Grant from $250,000 to $2M | 50% grant |
Skills Development
The Government has budgeted for $660M in training of apprentices and adult training over the next 4 years.
Health
The Government has allocated an extra $2.2B for improved access to General Practitioners and money for more nurses, plus an extra $467M for an E-Health system.
Small Medium Enterprises (SMEs)
Small Medium Enterprises (SMEs) could be affected by the impact of the resources super profit tax for the resources industries.
The Federal Treasurer, Mr Wayne Swan, presented the Rudd Government’s budget on 11th May 2010. The Treasurer indicated the budget was a “no frills budget” and it was. This series of posts incorporates a summary of matters within the Federal Budget, the Henry Review and other initiatives that have commenced in 2010 that may affect SME operators. Other than those items which have already commenced in 2010, none of the items contained within the budget, nor the Henry Committee Review, will become law until the budget and the various Henry Committee Review recommendations have been passed by the House of Representatives and the Senate, and signed by the Executive Council.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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