Whilst it is pretty old news, many of us in the business world tend to forget about this opportunity every financial year. So it is important to keep on reminding ourselves about it, especially as the benefit is to end on June 30 of this year.
Australian businesses with an aggregated turnover of less than $2 million using the small business entities depreciation regime can claim an immediate depreciation deduction for assets costing less than $20,000. This was, when launched a huge increase over the old threshold of $1,000.
With careful management, you will be able to work closely with your accountant to leverage this tax break.
It is important to note that it must be assets under the value of $20,000, with this number exclusive of GST. Any asset involved in running a business is covered by the scheme. There are a few items that can’t be claimed, including some plants and any software developed in-house by a business.
If you are a cafe, for example, investing in a new pizza oven, chairs and tables, along with a new cash register, then those are very applicable purchases. Looking towards a trades business, then there is no better time to head over to your local power tool stockist and load up on some of the latest and greatest tools, batteries and accessories available. Even items you take for granted, like safety gear, would be up for consideration.
This key encouragement to small business across all of Australia certainly appears to be a great incentive to get us all thinking opening up and\or developing our current small businesses further. In addition, with a small reduction in the taxation rate for businesses under $2 million of turnover, then it is an opportunity not to be missed.
We would recommend that you visit the ATO’s website to ensure that your planned purchase meets guidelines, but get moving quick!