Proposed increase to small business tax offset
year's Federal Budget announced an incremental increase to the small business
tax offset, from 5% to 16% over 10 years.
The Australian Treasurer announced in
the 2016-17 Federal Budget that the small business tax offset rate would
incrementally increase from 5% to 16% over a 10-year period, with plans to
increase the rate to 8% for the 2017 income year. As yet, the Bill containing these
changes has yet to pass through Parliament and it's not clear if and when this
If the legislation is not passed prior
to relevant tax returns being lodged, the ATO has announced that from an
administrative point of view, it will accept returns as lodged up until the
proposed law change has passed.
When the law is passed taxpayers will
need to seek amendments if the returns lodged do not reflect the new law.
If a taxpayer claims the increased rate
but the new law is not enacted as expected, the ATO has indicated that no tax
shortfall penalties will be applied and any interest accrued will be remitted
to the base interest rate up to the date of enactment of the law change.
In addition, any interest in excess of
the base rate accruing after the date of enactment will be remitted. However,
this will only be the case if the taxpayer actively seeks to amend their
assessment within a reasonable timeframe after the law is passed.?
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.