Time to prepare for new tax cuts

SMALL Business Minister Mark Arbib has reminded small businesses about some recent changes designed to help them improve cash flow and reduce red tape.

A recent survey commissioned by Telstra Business and the Council of Small Business of Australia revealed many businesses weren't aware of the Federal Government's tax cuts.

"From 1 July this year we are changing the asset write-off provisions for all small businesses and the changing depreciation arrangements for other assets - saving time, money and paperwork," Senator Arbib said.

"This means small businesses will be able to immediately write off all new assets valued under $6500.

"If a small business buys a computer for $3000, they can immediately write off the cost of the computer. This means the business can claim a deduction for $3000 in the first year in its tax return, as opposed to $450 in the first year under the current arrangements.

"In addition they will be able to write off up to $5000 for new motor vehicles, meaning increased cash flow.

"A tradesman on a 30% marginal tax rate buying a new $33,960 ute would receive an extra benefit of $1275 in the year they purchased it. The rest of the purchase value can be transferred into the general small business depreciation pool, which will be depreciated at 15% in the first year and 30% in later years."

Senator Arbib said he understood how hard small business owners worked and that they often didn't have the time to read the papers or visit government websites to find out this important information.

"I will be working closely with peak industry bodies to ensure this information is passed on to small business owners in the most efficient way possible," he said.