Business Budget Measures

The 2021-2022 Federal Budget has been announced on 11 May 2021, with a few welcoming measures for small businesses. Here are two main measures that would benefit your business once it becomes law.

Temporary full expensing extension

Businesses with an aggregated turnover of less than $5 billion will be able to continue to fully expense the cost of new depreciable assets and the cost of improvements to existing eligible assets in the first year of use.

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Maximize your tax deduction – Businesses

In this article we explore how businesses that have turnover less than $10 million can maximise their deductions to save on tax for 2018 year and other issues they need to be aware of – deadlines, things to do etc in the coming few weeks. We will touch on employee superannuation payments, $20,000 asset write off etc

This article will apply to businesses running as sole traders, companies, trusts and partnerships.

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2018/19 Budget Updates

The Treasurer handed down the Budget 2018/2019 on 8 May 2018. While there are a lot of proposed changes that will potentially affect individuals such as a 7 year Personal income Tax Plan to lower the income tax liabilities for individuals, there is no certainty as to whether they will become law in future. Meanwhile, let’s recap on the ones that are now law, and will affect taxpayers, especially small businesses immediately. The most important of these is the extension of the less than $20,000 immediate asset write off concession to 30 June 2019 for eligible small businesses.

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$20,000 Instant Asset Write Off Extension

Just a reminder…

The small business asset write off threshold of $20,000 will continue until the 30th of June 2018. This applies to small businesses with a turnover threshold of less than $10 million in the 2017 financial year.

To refresh your memory, the small business instant asset write off applies to small businesses that purchase assets costing less than $20,000.

Under this concession, business owners can deduct 100% of the asset in the financial year they are purchased, rather than having to depreciate the asset over its useful life which could be 10 years for example. .

Eligibility

The asset is to ready to use in the financial year you make your claim. This means the asset needs to be fully installed.

You must be a small business with a turnover under $10 million

Things will change 1 July 2018…..

On the 1st of July 2018 the ATO will be reducing the threshold from $20,000 to $1,000, so now is the time to consider whether you can take advantage of this opportunity.

If you are considering purchasing business assets, give us a call first.  We can help make sure you are getting the best deductions for your business.

 

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