Unlocking the Benefits: Understanding the 90 Test Small Business Concessions

Small businesses are the backbone of our economy, however, they often struggle to keep up with compliance requirements and costs that usually come with running a business. This is where the “90 Test” small business concessions come in – a set of rules that can help small businesses reduce their tax and red tape costs, and allow them to focus on running and growing their operations.

The “90 Test” is a set of eligibility rules that small business entities can use to determine their eligibility for tax concessions. Simply put, a small business entity is eligible for these concessions if it meets the requirements of the “90 Test,” which include:

1) The business must have a turnover of less than $10 million
2) The business must have assets worth less than $6 million

If a small business entity meets these eligibility criteria, it can take advantage of a range of concessions, including:

– Simplified depreciation rules
– Immediate deduction for assets costing less than $150,000
– Simplified trading stock rules
– Paying GST annually instead of quarterly
– FBT exemptions for work-related portable electronic devices
– Capital gains tax concessions

The above concessions are just a sample of what is available to small businesses meeting the “90 Test” criteria. However, it’s worth noting that some of these concessions may vary depending on the specific business situation and circumstances.

One of the key benefits of the “90 Test” concessions is that they reduce the complexity and compliance costs associated with running a small business. For example, simplified depreciation rules mean that business owners don’t need to keep track of the value of each asset they purchase, and can instead depreciate them all at the same rate.

Another benefit of the “90 Test” is that it provides a level playing field for small businesses, ensuring that they are not disadvantaged compared to larger competitors. By reducing the compliance burden and associated costs, small businesses are better able to compete on price and quality.

To illustrate the effectiveness of the “90 Test” concessions, let’s consider the example of a small business that sells handmade jewelry. This business has a turnover of $5 million and assets worth $4 million. Under the “90 Test” eligibility criteria, this business would be eligible for a range of concessions, including:

– Immediate deduction for assets costing less than $150,000
– Simplified trading stock rules
– FBT exemptions for work-related portable electronic devices
– Capital gains tax concessions

By taking advantage of these concessions, the jewelry business can save a significant amount of money on compliance costs and taxes, which can then be reinvested into the business to support growth.

In conclusion, the “90 Test” small business concessions provide eligible businesses with a range of benefits that help to reduce compliance costs, simplify tax rules, and level the playing field with larger competitors. Small business owners are encouraged to review their eligibility for these concessions and seek professional advice to maximize their advantages. By unlocking the benefits of the “90 Test,” small businesses can gain a competitive advantage and thrive in today’s fast-paced business environment.

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