In Australia, small businesses can now take advantage of $20k instant asset write-off provided that their annual turnover doesn’t exceed $10 million.
Just to purchase before 30 June 2017 to score the benefit for this tax year.
If you own a small business, this means that it’s possible to invest in equipment, such as a massage chair, which will improve working conditions for employees, or delight your customer in the waiting areas.
If this sounds like a viable option for your firm, here is some information you may find useful.
New opportunities for small businesses
If you run a small business in Australia, it’s now possible to take advantage of the opportunity to claim instant tax deductions for equipment or assets you have ready to use or new investments, which will benefit the business.
Provided that you have an Australian business number and your annual turnover is less than $10 million (this has increased from $2 million), you can now offset costs against your tax bill.
Under new legislation, you can claim assets worth up to $20,000 against your taxable income. This replaces the previous limit of $1,000. You must claim the deduction in the financial year in which you bought the asset, or the asset was installed ready for use.
Like more info about the tax break? See more
Valuable assets for small business owners
As a small business owner, you may be on the lookout for assets that could benefit your business and help to drive it forward.
Consider the introduction of massage chairs as a good example of how to make use of new taxation laws for business owners who run offices.
How often do you hear employees complaining about back pain or taking time off work as a result of muscular aches and pains?
By investing in massage chairs, you won’t just be reducing the risk of back pain. You can also help to tackle another leading cause of work-related illness, stress. Stress affects everyone from time to time, but severe, prolonged periods of stress can be incredibly debilitating.
Employees could take turn to use the chair, or you could place a massage chair in common areas to enable everyone access, including customers.
How does the new system work?
The process involves purchasing the asset, again, we’ll take the example of massage chairs for an office block, and then claiming the cost against your tax bill.
As long as you have an annual turnover of less than $10 million, you can claim up to $20,000 for assets that you have purchased or installed per tax year.
You can add a single asset worth up to $20,000 or a series of purchases that add up to less than $20,000.
If you buy an asset that is worth more than $20,000, you cannot make an instant claim.
Instead, your asset will be added to your small business pool.
A percentage of the pool is deducted at the end of the financial year, and the remaining balance will be used to calculate your overall tax bill.
If you have any questions or queries about your company’s tax bill or you want to make sure that purchases you make are eligible for tax deductions, it’s wise to seek advice from a financial advisor.