Announcements in last night’s Federal Budget will help smaller insurance broking firms and small business clients across Australia.
A small business will now be one where the annual turnover is less than $10m (previously the definition of a small business was one with a turnover of less than $2m). Where this is the case, the following will apply from 1 July 2016:
- Company tax will be reduced to 27.5%, benefiting around 870,000 companies;
- Simplified depreciation rules, including full tax deductibility for asset purchases costing less than $20,000 until 30 June 2017;
- Simplified methods of paying PAYG installments;
- A range of other measures to make tax simpler for small businesses.
The Budget supports previously announced proposals to reform the financial services system.
NIBA CEO Dallas Booth said: “There are a number of measures in the Federal Budget that may help make life easier for smaller brokerages, but once again this represents an opportunity for brokers to sit down and have conversations with their clients about their business strategy and their insurance programs.
“Small business owners are still able to access full tax deductibility for asset purchases costing less than $20,000 until 30 June 2017, and any purchases of this kind may well impact on the business’s sum insured.
“And with the definition of ‘small business’ being applied to businesses where the annual turnover is $10m, there are now more opportunities for brokers with larger clients to have these discussions and to really emphasise their role as trusted adviser to clients of all sizes.”