Instant asset write off popular

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The Australian Tax Office says simplified depreciation rules apply when small business clients write off assets costing less than $20,000.

PEARCE small businesses are taking advantage of the federal government’s instant asset write off increasing their bottom lines and improving cash flow.

Pearce MHR Christian Porter said 2015-16 tax office data showed  33,750 small businesses in Western Australia including 2685 in the Pearce electorate had benefited from the initiative.

Mr Porter said the instant asset write off was directly helping small businesses increase their bottom lines and improve cash flow which meant more investment and job creation.

“This means more money in the pockets of small businesses in Pearce so they can grow their businesses, employ workers and pay them more,’’ he said.

“That is why the Liberal Government increased the per-asset threshold of the instant asset write off from $1000 to $20,000 and extended the program in the Budget until June 30 next year.

“Cash flow is so important for small business operators and the instant asset write off means that tradies can invest in better tools, cafes and restaurants can upgrade their equipment and all small businesses can reinvest to grow their business.

“These great results are set to continue with tens of thousands more small businesses able to access the instant asset write off thanks to the Liberal Government’s increase in the small business turnover threshold to $10 million a year.

“The extension of the instant asset write off is just one part of the government’s plan to boost the economy and help small businesses invest and grow.”

He said small businesses were reaping the benefits of lower taxation after the Liberal Government recently secured tax cuts for around 3.2 million small and medium Australian businesses employing 5.6 million workers as part of its 10 year enterprise tax plan in the 2016–17 Budget.

The Australian Tax Office website says small business clients with a turnover of less than $10 million can write off assets costing less than $20,000.

“All simplified depreciation rules will apply to assets when choosing this method,’’ the website said.

“We have identified some tax agents have under-claimed by not applying all the simplified depreciation rules.

“To use simplified depreciation rules correctly you must write off eligible assets costing less than $20,000 each, pool most other depreciating assets that cost $20,000 or more, write off the small business pool balance if it is less than $20,000 at the end of an income year and only claim a deduction for the portion of the asset used for business or other taxable uses.’’