Assistance for unincorporated small businesses

The unincorporated small business tax discount will be increased in phases over ten years from the current 5% to 16%. Once the legislation receives royal assent the discount will first increase to 8% on 1 July 2016 and remain constant at 8% for eight years. Further increases will be made to 10% in 2024/25 and 13% in 2025/26, reaching a new permanent discount of 16% in 2026/27. The existing cap of $1,000 per individual for each income year will be retained.

From 1 July 2016, access to the discount will be extended to individual taxpayers with business income from an unincorporated business that has an aggregated annual turnover of less than $5m, an increase from the current threshold of $2m.

Please note: Although the Enterprise Tax Plan Bill was passed with Senate amendments, there was no change to this particular part of the Bill.

This measure was originally announced in the 2016/17 Federal Budget.

Source: Budget Paper No 2, p 40; Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016