Growth Customer Experience Productivity Business IQ Trends Success Stories Tech Solutions Subscribe Tech Enquiry
Alexandra Cain
Business Journalist

Alexandra Cain writes regularly for the small business sections of The Age, Sydney Morning Herald and Australian Financial Review

Alexandra Cain
Business Journalist

Alexandra Cain writes regularly for the small business sections of The Age, Sydney Morning Herald and Australian Financial Review

A raft of incentives and concessions were announced at the federal budget in May that mean it’s now easier than it’s ever been to start a new enterprise. So what are you waiting for?

The government is supporting start-ups and early stage ventures, with numerous incentives announced at the May budget to encourage the start-up economy. So once you’ve got your business plan sorted, there are a number of ways you can help reduce your starting up costs. Let’s take a look at what they are.

Man standing in store

Instant write-offs

One of the major benefits announced by Federal Treasurer Joe Hockey is the ability to immediately write off professional expenses incurred in starting a business. So if you seek advice from an accountant or a lawyer, for example, about setting up a new company you will be able to immediately claim these fees as tax deductions. This change will apply from the 2015-2016 income year.  Although not yet in effect, once in force it’s a great way to ensure start-ups are seeking the right help from their inception.

Tax breaks

Another significant bonus for new enterprises are re-jigged tax laws that mean unincorporated businesses that have an aggregated annual turnover of less than $2 million– which make up the lion’s share of commercial structures in Australia and especially new businesses – can benefit from a 5 per cent tax deduction on their income tax payable, up to $1000 for each income year.

Here’s how it works. Let’s say your new business earns $300,000 in the current financial year, of which $75,000 is taxable. Under the previous system, $16,000 in tax would be payable. But under the new system the business would only pay $15,200 in tax, a benefit of $800. This change is for the 2015-2016 income year however, legislation for this measure has not yet been drafted.

FBT exemption

One of the major announcements was a fringe benefits tax (FBT) exemption from 1 April 2016. For small businesses (with an aggregated annual turnover of less than $2 million) that provide employees with more than one qualifying work-related portable electronic device, an exemption applies even where the devices perform significantly similar functions.

Currently, an FBT exemption can apply to more than one portable electronic device used primarily for work purposes, but only where the devices perform significantly different functions. This makes it much more attractive for businesses to purchase items such as smart phones and tablets, that are integral to getting operational. The measure has been designed to encourage businesses to invest in digital technologies to make their operations more efficient. Although not in force yet, the legislation is currently being developed for this measure. 

Special start-up measures

There have also been a number of other incentives just for new businesses. For instance, the government is taking steps to make it easy for emerging businesses to access crowd funding. As long as these measures go ahead, it will widen the pool of funding sources for start-ups so they are not so reliant on traditional funding channels, providing a much needed new source of funds for early stage ventures.

Moreover, the federal government is going to enable favourable tax rules for employee share schemes, meaning that start-ups will be able to offer staff equity in their remuneration packages without triggering adverse tax consequences. This will make it easier for new businesses to operate on a level playing field with larger businesses when it comes to putting together remuneration and incentive packages for staff, allowing them to land better and brighter talent.

In addition, the federal government is introducing a simplified online registration system for setting up a new business, including registering a company. This will help slash red tape for start-ups and will mean they can focus less on administration tasks and more on revenue-generating activities.

It’s an exciting time to be building a new business. 

Looking to start your own business?

Accelerate your startup with muru-D.

Find out more

Unfiltered Conversations: Happiness, resilience and work-life balance for mental and physical health
Success Stories
Success Stories
Unfiltered Conversations: Happiness, resilience and work-life balance for mental and physical health

With Natasha Chadwick and Carolyn Creswell Unfiltered Conversations pairs brilliant business women who are disrupting the status quo, for an honest, intimate and authentic conv...

Solution to misplacing assets: Tagging with tech
Tech Solutions
Tech Solutions
Solution to misplacing assets: Tagging with tech

Looking for a way to secure the tools of your trade? From tools on a work site to the electronic devices across your business, new tagging technology offers you simple, quick a...

How-to: Prepare your business for E-commerce sales holidays
Customer Experience
Customer Experience
How-to: Prepare your business for E-commerce sales holidays

Customers love online bargains – no surprises there. But in recent years, digital sales events such as local efforts Click Frenzy in May and the U.S’s Black Friday have had a r...

Flexibility in practice: tips and insights from our Telstra Business Women’s Awards winners
Success Stories
Success Stories
Flexibility in practice: tips and insights from our Telstra Business Women’s Awards winners

Is the traditional work week redundant? For a growing number of small-to-medium businesses, the days of clocking on at 9am and clocking off at 5:01pm are already gone. As are v...