The previous Labor Government made a couple of very generous changes to the depreciation rules to benefit small business, which the new government is set to take away when the clock chimes the end of 2013.
Currently small businesses with revenue of $2million can instantly write off assets up to the value of $6,500. On motor vehicles, a once off deduction of $5,000 is allowed on any vehicle costing $6,500 or more.
As part of a group of bills to repeal the Minerals Resource Rent Tax, the instant write off threshold will be reduced to $1,000 and the motor vehicle write off will be repealed altogether.
What this means is that from a tax perspective it is advantageous to purchase assets before 1 January 2014….so it looks like a spot of business Christmas shopping may be in order.
Here are some ideas:
New Set of Wheels
Now is a good time to buy a new car. But you’d better be quick because it will have to be on the road before the New Year’s champagne glasses start clinking.
The Latest Computer Technology
If your computers are out of date or getting a bit clunky then the time to replace them is now.
Productivity Improving Gadgets
If you’ve got a team on the road, now would be a good time to consider investing in iPhone or iPad technology and some clever apps like Invoice to Go. Not only will you get the deduction, but you can start the New Year with your team spending less time on administration and more time servicing your customers.
A Word of Warning
We are all in favour of investing in your business and this is certainly a good time to make an investment. But make sure your cash flow can cope with the expense before handing over the credit card!