The end of the financial year is quickly approaching, with this have you considered taking advantage of the small business concessions available to you?

There is one concession that many small businesses are taking advantage of before it expires on 30 June 2018, this is the $20,000 asset write off. This legislation was passed on 12 May 2015 allowing businesses with a turnover of less than $2m to claim an immediate tax deduction on assets costing less than $20,000 – note this is available for multiple purchases (excluding GST if you are registered for GST or including GST if you are not registered).

Bear in mind this is a tax deduction rather than a tax saving, meaning your purchase will reduce your tax liability (so you will not receive the money back from the tax office). Furthermore, this saving will not be received until after you have lodged your business tax return after the end of the financial year.

Assets that are eligible for the concession include most depreciable assets (including second hand items), for example motor vehicles, furniture, plant and equipment, tools, sheds etc.

The new laws also include changes to allow primary producers to immediately deduct capital expenditure on fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills.

The following assets are not included:

  • Building or extensions (structural improvements)
  • In-house software
  • Horticultural plants, including grapevines
  • Assets that are leased out

Some of un-known business assets that are applicable include:

  • Guard Dogs used for security at the business premises
  • Artwork to be hung in the office reception area or meeting room
  • Entertainment for the staff kitchen or waiting room (for example a Xbox, TV or Ping Pong table)
  • Dishwasher or coffee machine for use in the workplace kitchen.

Before making any big purchases decisions, we do recommend you contact us on (07) 3862 8777 first to ensure you are eligible for the concessions.

If you would like further information on this subject, please refer to the ATO website in the below link:

https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Small-Business—expanding-accelerated-depreciation/?page=1#Legislation_and_supporting_material