Small Business Tax Write-Off

The 2017 budget has announced a big win for small companies with the extension of tax write-off scheme which allows businesses (with an annual turnover of less than $10 million) to buy business capital plant and equipment for less than $20 000 and receive an immediate tax write off. This is a great tax incentive as it can result in tax savings between $5,500 and $9 800, depending on your tax bracket. This scheme originally introduced in 2015 will now be extended until 30 June 2018.

Is Your business eligible?

1. You have an annual turnover of less than $10 million
2. You must keep records of all purchases to be claimed

What can your business claim?

1. Individual capital expenditure must be less than $20,000. For example, an item costing $25,000 does NOT qualify.
2. GST is excluded. For example, assume equipment costs $21,000 including GST of $1,909. The equipment qualifies as the cost is $19,091 GST exclusive.
3. Motor vehicles are eligible.
4. The rules apply to multiple purchases of capital equipment that are individually less than $20,000. For example, if a business purchased 30 computers for a cost of $1,000 each.
5. The total cost of $30,000 is eligible.
6. There is no upper limit to the amount that can bought, just a limit per item. For example, there is no reason why a claim can’t be made for $100,000 provided every individual item is less than $20,000.
7. The equipment may be new or second hand.
8. Farmers receive additional concessions.

This is a simplified summary of what is eligible. Contact Rede Accountants to discuss further advice to suit your circumstances.

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