Time is running out for small businesses to take advantage of the current small asset write off threshold before changes come into effect from 1 January 2014.
The Institute of Public Accountants (IPA) has issued a call out to small businesses around Australia, that the small asset threshold will drop from $6.5K per asset to $1K, as part of the repeal of the Minerals Resource Rent Tax (MRRT).
“It is understandable that the Government needs to find ways to plug the hole left by the MRRT repeal but we would encourage small businesses to do some asset Christmas shopping if they are in a position to do so,” IPA CEO, Andrew Conway said.
“After 31 December, the asset write off threshold reverts back o $1K per asset so small businesses will need to factor a slower tax pay back period,” he added.
As it stands, business owners will need to buy before 1 January 2014 to get the full tax deduction for assets costing less than $6,500. The extra-accelerated depreciation claim of $5,000 for motor vehicles will also be scrapped by this deadline.
The IPA also noted that as part of the MMRT repeal, it is disappointed to see the the scrapping of the loss carry-back initiative after just a one year life-span.
“The loss carry back changes were mainly intended to give viable small businesses a boost when they need it the most through more timely tax loss relief,” Conway said, adding the IPA is hopeful that the Government will its decision to reverse the repeal of the loss carry back initiative.
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