Trade Risk published a great article explaining how the 2016 budget affects tradies.
A few main points noted:
In last night’s budget the size of the cut and the turnover limit was increased, bringing the rate down to 27.5% from 1 July 2016 for businesses turning over less than $10 million.
This doesn’t represent a huge benefit for a typical trade business, but it’s certainly better to keep a few extra dollars in your own pocket rather than gifting it to the ATO.
The cuts will continue each year for the next decade until the rate for all companies is 25%.
Tradies with a taxable income of more than $80,000 will benefit from a tax cut in this year’s Budget. The benefit comes by moving the tax bracket from $80k to $87k, meaning that the next highest tax rate (37%) won’t kick in for another $7k.
The tobacco excise will increase by 12.5% each year for the next four years, meaning the cost of a pack of smokes will increase considerably over that time
There was plenty of money put aside for roads and infrastructure over the coming years.
Whilst this doesn’t directly affect the dollars in your pocket, it can be seen as a positive.
More infrastructure projects means more work around for tradies, and given how much time we spend getting from job to job, better roads are also a boost.
Budget 2016 certainly won’t be changing any tradies lives one way or the other, but no one’s going to knock back a tax cut.
If you run your business via a company setup and earn more than $80k in personal taxable income, then you have to consider this budget a win.