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Small business tax concession - act before 1 January 2014

Posted by Medical Financial Group on 6 December 2013
A windfall for small business operators is about to removed.

The previous Labor government had increased the threshold allowing small business to claim a full tax deduction for the purchase of capital items (business equipment) costing up to $6,500. This was a significant increase from the previous threshold of $1,000. This meant you were able to claim a tax deduction for the full value of the equipment, instead of claiming a portion of the purchase price over several year, by way of depreciation deduction over useful life of a business asset.

The new Abbot government announced some months ago they would repeal this legislation, meaning the maximum threshold to claim an immediate tax deduction will be reduced back to $1,000. This was expected to take effect from 1 July 2014.

However, recent amendments to the Bill introduced to Parliament on this repeal states the effective date will now be 1 January 2014.

This means if you are considering the purchase of any business related equipment costing $6,500 or less, then you should act before 1 January to secure an immediate tax deduction for the current financial year.

Any business operating with an ABN, whose business income (turnover) is $2,000,000 or less qualifies for this concession, and the usual deductibility rules apply (meaning the equipment purchase must be used and relate to your business activity).

If you are not sure how this change may affect you, we invite you to contact our office to discuss your affairs with our team.

 

Author: Medical Financial Group
Tags: News Tax

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