In our last post we outlined what the 2015 budget meant for small business owners of cafes and restaurants. We specifically took a look at the instant asset write off and why it could be time to invest in a new POS. Today we take a further look at the range of other small business incentives announced in the 2015 budget and how your hospitality business can benefit.
Tax cuts
The instant asset write off wasn't the only tax concession announced in the 2015 budget. If you are restaurant and cafe owner and your business has an annual turnover of less than $2 million then you will receive a tax cut from next financial year.
If your restaurant or cafe is registered in a company structure then from July 1, 2015 your tax rate will reduce from 30% to 28.5%.
If you're an unincorporated business then you will receive a 5% tax discount from July 1, 2015. This means that any income you earn from your cafe or restaurant is eligible for a 5% discount on your tax bill. This concession is capped at $1,000.
If your restaurant or cafe is registered in a company structure then from July 1, 2015 your tax rate will reduce from 30% to 28.5%.
If you're an unincorporated business then you will receive a 5% tax discount from July 1, 2015. This means that any income you earn from your cafe or restaurant is eligible for a 5% discount on your tax bill. This concession is capped at $1,000.
Reducing red tape
The government also announced a range of measure in the 2015 budget aimed at reducing red tape for small business.
One of these was a change to the Fringe Benefits Tax (FBT). For businesses whose annual turnover is less than $2 million then any portable electronic device you provide to employees from July 1, 2016 will no longer attract FBT. A portable electronic device covers things such as mobile phones, laptops and tablets.
Another measure announced in the budget was Capital Gains Tax (CGT) relief for small businesses who decide to change legal structure and incorporate their business.
Currently CGT relief is only available for individuals who decide to incorporate, its is not available to businesses in any other structure, for example a partnership or trust. The new rules apply from July 1, 2016 and are aimed at small business who decide that their initial business structure may no longer be appropriate once they have begun operating and are more established.
One of these was a change to the Fringe Benefits Tax (FBT). For businesses whose annual turnover is less than $2 million then any portable electronic device you provide to employees from July 1, 2016 will no longer attract FBT. A portable electronic device covers things such as mobile phones, laptops and tablets.
Another measure announced in the budget was Capital Gains Tax (CGT) relief for small businesses who decide to change legal structure and incorporate their business.
Currently CGT relief is only available for individuals who decide to incorporate, its is not available to businesses in any other structure, for example a partnership or trust. The new rules apply from July 1, 2016 and are aimed at small business who decide that their initial business structure may no longer be appropriate once they have begun operating and are more established.
Help to hire staff
The third aspect of the governments small business package that is set to benefit the hospitality industry in particular is assistance when hiring employees. There are three ways operators of cafes and restaurants could benefit:
- Under a new National Work Experience Programme, the government will provide opportunities for employers to offer work experience for unemployed job seekers. This will come into effect from January 2016
- Flexible wage subsidies will be available to employers under the Restart, Youth and Long Term Unemployed wage subsidies program.
- Changes to the Restart Programme from January 2016 will make it easier to get government support when small business hire older workers.
Make the Budget work for your restaurant or cafe
Small business were a big focus of the 2015 budget and we have outlined three areas where owners of cafes and restaurants can benefit. The tax cuts, in combination with the instant asset write off, cuts to red tape and employer incentives gives the hospitality industry an incentive to invest in productive assets for their business and look to hire new workers.
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