Small Business Tax Break for assets purchased under $20,000

If you have a business that qualifies for the instant tax write off, and have made a profit during the 2017/2018 Financial Year, qualifying purchases of assets valued less than $20,000 will reduce your tax liability by 28% of the amount you spend. This means purchasing $2000 of assets will reduce your tax liability by $560. When you add this to the 20% discount available until 30th June 2016 offered by ArborMaster for purchases $2000 or over, the actual out of pocket cost of purchasing $2000 of Arbor Equipment is only $1152(approx).

To put it simply, you can get $2,000 of Arbor Equipment for $1,152 before 30 June!

Here is some more information about the government’s $20,000 Small Business Tax Break.

This article is provided based on information available at the time of publication. This does not constitute tax advice and we encourage you to consult with your accountant before making any decisions.

Who gets the tax break?

If you are registered business, i.e. you have an ABN, and it turned over less than $2 million you are eligible to claim the $20,000 instant asset write-off.

How much?

Businesses can buy any machinery or equipment related to their business if each item is valued at less than $20,000. You can claim the full amount of the asset as an expense to reduce your tax bill. There is no limit on the number of items a business can claim.

What can I claim?

Chainsaws, lawn mowers, mulchers, blowers, safety equipment, hedge trimmers, log splitters, brushcutters, harnesses, rigging equipment, arbor gear, and more – any item used for running your business – will be 100 percent tax deductible.

What can’t I buy?

You cannot use the money to buy stock for your business. Horticultural plants and in-house software also do not qualify.

If my item is $20,000 or over can I still claim it?

Yes, but the value of items over $20,000 qualify for less generous and more complicated tax breaks associated with depreciation.

When does it end?

On 9 May 2017, the Government announced an extension to the 2015-16 Budget measure providing an instant asset write-off provision for small business.

Small businesses can immediately deduct the business portion of most assets if they cost less than $20,000 and were purchased between 7:30PM on 12 May 2015 and 30 June 2018.

For more information, visit the Australian Taxation Office website at www.ato.gov.au or speak to your accountant.