How to Take Advantage of the 90 Test Small Business Concessions
As a small business owner, you may have heard of the 90 Test Small Business Concessions, but you may not be aware of how to take advantage of them. These concessions are aimed at helping small businesses grow, but they can be tricky to navigate. This blog will explain what the concessions are and how you can use them to benefit your business.
What are the 90 Test Small Business Concessions?
The 90 Test Small Business Concessions refer to a set of rules that determine whether a small business is eligible for certain tax breaks. The test considers a range of factors, including a business’s turnover, assessable income, and base assessment income.
How can you qualify for the concessions?
To qualify for the 90 Test Small Business Concessions, your business must meet certain criteria. The criteria apply to both the turnover test and the net asset value test. Your business must:
– Have an aggregated turnover of less than $10 million in the current year, and
– Have net assets valued at less than $6 million.
If you meet these criteria, you can apply for the concessions.
What are the benefits of the concessions?
If you qualify for the 90 Test Small Business Concessions, you may be eligible for a range of tax benefits, including:
– Simplified depreciation rules, which allow you to claim an immediate deduction for the cost of assets costing less than $30,000.
– The small business income tax offset, which can reduce the tax your business pays by up to $1,000.
– The instant asset write-off, which allows you to immediately write off the cost of new or second-hand assets that cost less than $150,000.
– Capital gains tax concessions, which allow you to reduce the amount of tax you pay on capital gains made from the sale of assets.
How can you maximize the benefits of the concessions?
To maximize the benefits of the 90 Test Small Business Concessions, it’s important to keep accurate records of your business income and expenses. This will help you determine which concessions apply to your business and ensure that you claim them correctly.
It’s also important to review your business’s financial position regularly and seek professional advice when necessary. A qualified accountant or financial advisor can help you identify areas where you can make savings and take advantage of the concessions.
Case Study: How one small business used the concessions to save money
ABC Design is a small graphic design business with an annual turnover of $8 million. The business had been struggling to keep up with its tax obligations and was facing a large tax bill.
After seeking the advice of a qualified accountant, ABC Design discovered that it qualified for the 90 Test Small Business Concessions. The accountant helped the business identify which concessions applied to them and ensure that they claimed them correctly.
As a result, ABC Design was able to reduce their tax bill by over $10,000. This was a significant financial relief for the business, which was able to reinvest the savings back into the business.
Conclusion
The 90 Test Small Business Concessions offer a range of benefits for small businesses. By meeting the criteria, you can take advantage of tax breaks that can help your business grow. To maximize the benefits, it’s important to keep accurate records, seek professional advice, and regularly review your business’s financial position. By doing so, you can reduce your tax bill and reinvest the savings back into your business.
