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

Changes are being made this year to help small businesses by allowing them to plan their capital purchases and maximise cash flow. From 1 July, the Federal Government is changing the asset write off provisions for all small businesses and the changing depreciation arrangements for other assets - saving time, money and paperwork.

This means small businesses will be able to immediately write off all new assets values under $6,500.

For example, if a small business buys a computer for $3,000, they can immediately write off the cost of the computer. This means the business can claim a deduction for $3,000 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 $5,000 for new motor vehicles, meaning increased cash flow.

A tradesman on a 30 per cent marginal tax rate buying a new $33,960 ute would receive an extra benefit of $1,275 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 per cent in the first year and 30 per cent in later years.

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