KEY POINTS

NEW TAX DE­DUC­TIONS ARE A BOON FOR SMALL BUSI­NESS

Mt Druitt - St Mary's Standard (East) - - TRADES + SERVICES -

TRADIES are hop­ing to use the Fed­eral Gov­ern­ment’s re­cently an­nounced tax break to ex­pand or up­grade their busi­nesses.

Master Elec­tri­cians Aus­tralia chief ex­ec­u­tive Mal­colm Richards said the $20,000 in­stant write-off for busi­ness as­set pur­chases would al­low elec­tri­cal con­trac­tors and other trades­peo­ple to in­vest in the tools needed to keep their staff safe and work­ing ef­fi­ciently.

The 2015 Fed­eral Bud­get pro­posed al­low­ing small busi­nesses with an an­nual turnover of less than $2 mil­lion to im­me­di­ately deduct as­sets up to a to­tal of $20,000.

This re­places the pre­vi­ous in­stant as­set write-off thresh­old of $1000. The Fed­eral Gov­ern­ment has al­lo­cated $1.75bil­lionto­fundthescheme,which will run for the next two years. There are three im­por­tant things to re­mem­ber when claim­ing workre­lated ex­penses: 1. You must have spent the money 2. It must be re­lated to your job 3. You must have a record to prove it

For more in­for­ma­tion, visit ato.gov.au/de­duc­tions or phone 132 861

Ar­borist Steve Slaugh­ter said the de­duc­tion could help him buy chain­saws, ropes and safety equip­ment.

“A good chain­saw costs be­tween $1000 and $2000. limb­ing gear costs around $3000 for one guy,” he said.

The $20,000 limit ap­plies to in­di­vid­ual as­sets, mean­ing small busi­nesses can ap­ply the rule to as many dif­fer­ent items as they wish.

The as­sets must have been bought, in­stalled and ready for use be­tween 7.30pm on May 12 this year and June 30, 2017.

The Aus­tralian Tax­a­tion Of­fice (ATO) has pro­vided an ex­am­ple of how this may ap­ply to a small busi­ness: “For ex­am­ple, Pamela bought a sec­ond-hand skid steer loader for $17,000 on May 28, 2015, which is used solely in her land­scap­ing busi­ness.

“As the as­set cost less than $20,000, Pamela will be able to claim an im­me­di­ate de­duc­tion for it.

“For as­sets cost­ing more than $20,000, small busi­nesses can elect to use the pool­ing ar­range­ments and de­pre­ci­ate the cost of such as­sets at 15 per cent in the first year and 30 per cent each year there­after.’’

Items that can’t be claimed un­der the rule in­clude plants, cap­i­tal works, petrol and op­er­at­ing ex­penses.

As­sets that can be bought in­clude tools of the trade such as weld­ing equip­ment, chain­saws and gen­er­a­tors.

Com­put­ers, tablets and phones used solely for work are ap­pli­ca­ble.

Ve­hi­cles are in­cluded if they fall un­der the $20,000 thresh­old — which does not in­clude GST.

As this law change will be ret­ro­spec­tive, the ATO says it is im­por­tant small busi­nesses un­der­stand obli­ga­tions un­der the ex­ist­ing and pro­posed laws.

Im­por­tantly, un­der the an­nounced new mea­sure, small busi­nesses will need to keep records of their pur­chases in or­der to ver­ify their de­duc­tion.

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