The budget includes $20,000 tax break for small business, here’s how to claim it.
- May 13, 2015
STARTING from 7:30pm last night, small businesses with a turnover of less than $2 million can immediately tax deduct any item costing less than $20,000.
WHAT WAS THE PREVIOUS ARRANGEMENT?
The previous threshold was $1000, and the tax deduction was claimed over five years.
HOW LONG FOR?
The new accelerated depreciation rules run from last night until the end of June 2017.
WHAT CAN I BUY?
Anything used for running your business: computers, printers, office furniture, coffee machines, kitchen equipment, cars, tools. You can use the tax write-off on as many individual items as you want.
WHAT CAN’T I BUY?
Stock for your business, office software and plants will be excluded, as will marketing costs.
WHAT IF IT’S MORE THAN $20,000?
Any items over $20,000 can be pooled together and depreciated at the same rate — 15 per cent in the first income year, and 30 per cent per year after that. If the value of the pool drops below $20,000, it can be immediately deducted.
CAN I RORT THE SYSTEM?
Probably. But Joe Hockey says he’s not concerned. “People aren’t going to spend money on their business if it’s not going to make them a dollar,” he told ABC radio on Wednesday, when asked if he was worried people would claim plasma TVs and office couches.