The countdown to year-end
New Year’s Eve is just 17 days away, and while many of us will soon pause to reflect on the year that has passed, small businesses also have an important tax deadline approaching. Several small business concessions will change from 1 January 2014, reducing the immediate tax benefits available on asset purchases.
Changes to the small business instant asset write off
Small businesses with turnover under $2 million currently have access to a higher instant asset write off threshold of $6,500. However, from 1 January 2014 this threshold will drop significantly to $1,000.
This means that assets costing less than $6,500 can be written off immediately up to 31 December 2013, but only assets costing less than $1,000 can be written off immediately in the new year.
End of accelerated motor vehicle deductions
The accelerated deduction that allows small businesses to write off the first $5,000 of a motor vehicle purchase will also cease on 1 January 2014. From that date, motor vehicles will be depreciated under standard rules rather than receiving the additional upfront deduction.
Consider bringing forward asset purchases
If your business is planning to purchase equipment, tools, computers, machinery or vehicles, it may be worthwhile completing the purchase on or before 31 December 2013 to take advantage of the higher write off threshold.
Remember that the instant asset write off applies on a per-asset basis, not in total.
Our seasonal message
Bramelle Partners wishes all clients and business owners a Merry Christmas and a prosperous New Year. If you need advice on year-end purchasing decisions or tax planning, we are here to help.
