$5,000 immediate asset write- off for small business – Small business will receive an immediate tax write-off of $5,000 on asset purchases, including motor vehicles. This is a timing difference, not an extra tax deduction.



Fringe Benefits Tax – There will be a gradual phasing in over the next 4 years of a flat FBT rate of 20% on motor vehicles. This will only apply to cars purchased after 10 May 2011. This will help some business owners from a compliance point of view but a flat rate of 20% disadvantages your if you use your car primarily for work purposes.



Entrepreneur Tax Offset – The Entrepreneurs Tax Offset will be abolished from 1 July 2013. 



Lower Company Tax – Those using a company structure will benefit from a 1% cut to the company tax rate. Small business will received this cut in the 2012/13 financial year with big business following suit in the 2013/14 financial year. Keep in mind that whilst the company may have an income tax rate of 29%, profits distributed to resident shareholders will still be assessed at normal individual income tax rates.



Low-Income Tax Offset – Amounts able to be distributed tax free to minors from discretionary trusts will be severely reduced from 1 July 2011, as the Government has announced the withdrawal of the Low Income Tax Offset of $1,500 to those under the age of 18. 



Self-Education Expenses for Youth Allowance recipients – Legislation is set to be drafted preventing students receiving Youth Allowance from claiming their education expenses as deductions from 1 July 2011.



Flood Levy – The flood levy begins 1 July 2011 and details of the carbon tax are set to be outlined in July 2011.



For a full discussion on the budget or if you have any questions about it send us an email and we will contact you with a time to meet with you.