As of 1 January 2014 a number of tax benefits currently available to small businesses will be repealed. This leaves only a small window of opportunity to take advantage of these benefits before they are gone.
The repeal of these tax benefits are currently making their way through parliament and form part of the new Federal Government’s plan to tackle the budget defecit.
With regards to small business, being businesses with an aggregated annual turnover of less than $2 million, the two main areas affected are the “Instant Write-off Threshold” and the “Accelerated Depreciated for Motor Vehicles.”
Instant Write-off Threshold
This threshold allows small businesses to obtain an immediate deduction for business-related assets which cost less than $6,500 (GST exclusive). This threshold will revert back to the former threshold of $1,000 (GST exclusive).
Accelerated Depreciation for Motor Vehicles
This concession provides an immediate deduction for the first $5,000 of any business related motor vehicle purchased. Once this concession is repealed future motor vehicle purchases may only be depreciated subject to normal, less concessional, depreciation rates.
You have only got a small amount of time before these benefits are repealed. If you are considering purchasing assets in order to obtain the accelerated tax benefits bear in mind that the assets must be acquired and in use prior to 1 January 2014.
We suggest you speak to your accountant along with reviewing your budget and your needs to determine whether it will be beneficial for you to take advantage of these concessions before they are gone.
Do not hesitate to contact us if you have any queries.
We will continue to keep you informed about any tax law changes that will affect you.