If you are just starting out in business, understanding the corporate tax rate is something you should understand to ensure your small to medium business can take advantage of corporate tax cuts that you may be entitled to/for.
Budget 2017 and corporate tax cuts
On Friday 31 March 2017, the government achieved political victory in the face of brinksmanship which passes for the reduction of the company tax rate to 25% phased in over 10 years.
In 2017 the company tax rate drops to 27.5% with eligibility measured on turnover being less than $10m.
Corporate tax cuts for small business
For those small businesses that do not currently operate through a company structure, the tax rate reduction may warrant a review of those arrangements. Any structural change will generally require a wide ranging and careful review, taking into account many factors but the locked in reduction in the lower company tax rate may be a sufficient reason to give close consideration to a move into a company structure.
Claiming corporate tax cuts for a SME
Other incentives which present in a company structure is access to the R&D tax incentive, which subject to certain criteria can provide for a refundable tax offset based on costs incurred by the business. Indirectly, these corporate tax cuts via R&D incentives provides funding for a small to medium business to explore research and development in the industry in which it pursues.
Do you have a Tax Plan?
At RSM we can ensure you are kept up to date with the latest in corporate tax cuts.
If after reading the above I still have your attention and your enthralled by the impact this corporate tax cut may have on your small business please do not hesitate to contact one of the team from RSM Evolve.