Remember the excitement when the Federal Government introduced the instant asset tax write-off for small businesses in the 2015 budget? There was a whole lot of fanfare, commentators and business personalities weighed in with their praise of the initiative and then... crickets. So you'd be forgiven if it's slipped your mind.
With the end of the financial year fast approaching, this is a great time to review the details and take action before the initiative winds up on 30 June 2017. Here's a quick summary:
Who gets it?
If you are a registered business with an ABN and your business turnover is up to $10 million since 1 July 2016, you can claim. (Note the scheme was originally available for businesses with turnover up to $2 million in the year ending 1 July 2016, and was updated in the 2016 budget)
Businesses can buy any machinery or equipment related to their business if each item is valued at less than $20,000. You can claim the full amount from your income to reduce your tax bill. There is no limit on the number of items a business can claim.
What can I claim?
Cars, vans, utes, trailers, motorbikes, lawnmowers, ovens, fridges, coffee machines, other machinery, kitchens, tables and chairs, carpets, printers, photocopiers, tools, welding equipment, saws, generators, pumps, solar panels, heating, hot water units, water tanks, air-conditioning units, sound and security systems, computers. Any item used for running the business will be 100 per cent tax deductible!
What can't I buy?
You cannot use the money to buy stock for your business. Horticultural plants and in-house software also do not qualify.
If my item is $20,000 or over can I still claim it?
Yes, but the value of items over that amount qualify for less generous and more complicated tax breaks associated with depreciation.
If you're ready to finance some new equipment or would like more information about how your business could take advantage of this tax break give me a call on 0412 534 503.