As you are all no doubt aware, there is a Federal election
to be held on Saturday, 7th September 2013.
The polls would indicate that there is a probability of a
change of government to the Coalition.
There were a number of tax incentives introduced by the
Labor government linked to the introduction of the carbon tax. These incentives
were specifically aimed at small business – defined for the 2014 financial year
as those businesses that have an annual turnover of under $2m, either in the
prior financial year (2013), projected for the current financial year as
assessed now (2014) or actual for the 2014 financial year, as assessed at the
end of the 2014 financial year. These entities include partnerships, trusts and
companies who are termed Small Business Entities (SBE).
The Opposition have announced that should the Coalition form
Government after the election that they will repeal the following tax
incentives that are currently available for SBEs:
1)
The immediate tax deductibility for asset
purchases costing less than $6500, net of GST.
2)
The immediate tax deduction of $5000 of the cost
of a motor vehicle. The net balance after the initial $5000 deduction is added
to your General SBE pool, to be written off 15% in the year of purchase and 30%
each subsequent financial year, subject to an adjustment for private use.
3)
The ability to “carry back” a loss made by a
company in one year against profits made in the prior year (can be up to 2
years, depending on the financial year), effectively enabling the company to
get a refund of part or all of the company tax paid in the relative prior year.
At this stage it is unknown firstly whether there will be a
change in Government, and secondly when these changes will be effective from
should there be a change.
My suggestion is that if your business is a SBE, and you
have been considering purchasing either plant, fixtures or equipment
costing less than $6500 or a motor
vehicle that is at least partially for business use, in your business entity, you
should give serious consideration to purchasing them prior to the election –
the tax benefits will be substantially enhanced!
If you are at all in doubt, I suggest you contact your
accountant.
2 comments:
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