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| Small Business | |||
| Staff Profile | - Fiona Dunn | ||
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11 things to know about the Small Business and General Business Tax Break The government has now formally introduced a generous investment allowance for both small and larger businesses in Australia. The first and original version of the legislation was introduced some time ago and various amendments were made before it finally received Royal Assent on 22 May 2009. If instigated correctly and in accordance with the legislation it can provide generous tax relief. However, it is also important to be aware of the strict penalties that apply for errors in claiming the allowance, especially if you made purchases before the legislation was formerly passed, as what may have been eligible under the first draft, may not be under the final version. Things to be aware of include; For small
business entities (turnover of less than $2,000,000 per year) Other
business entities (turnover of over$2,000,000 per year) 3. Additional 10% deductions are still available if you miss the above deadlines. This applies if you either: 1) commit to investing in the asset between 13 December 2008 and 30 June 2009 and install it between 1 July 2010 and 31 December 2010; or 2) commit to investing in the asset between 1 July 2009 and 31 December 2009 and install it between 1 July 2009 and 31 December 2010. 4. A minimum expenditure threshold of $10,000 will apply to be eligible to claim the 30% or 10% deduction. What is (or is not) an eligible asset? 5. The tax break applies to new, tangible depreciating assets such as cars, vans, trucks and other business vehicles; computer hardware, tools and furniture as well as investments in existing assets such as substantial improvements or additions. 6. It does not apply to second-hand goods, land, capital works, trading stock and intangible assets such as software or intellectual property rights. Claiming for cars 7. Taxpayers using the ‘one-third of actual expenses’, ‘log book’ and the ‘12% of original value’ methods are eligible for the tax break. 8. Taxpayers using the ‘cents per kilometre’ method are not eligible to claim the Tax Break. Other
Miscellaneous Points to Note 10. A business ‘commits’ to investing when: a contract is entered affirming the asset to be held or improved; it begins construction on the asset/improvement; or starts to hold the asset in some form. 11. The cost of items forming part of a set and the cost of identical or substantially identical assets may be added together for the purposes of meeting the thresholds. For more information about whether your business may be eligible for the investment allowance or perhaps you are considering making a purchase and need advice as to whether you can claim the tax break, contact The Quinn Group on 1300 QUINNS or visit www.quinns.com.au and submit an online enquiry. |
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