If you are in small business, be aware that some tax concessions available to you are planned to be removed and some planned taxes will be removed. If you can take advantage of the tax concessions available under the former Government, do it now. As long as the changes are not retrospective (which is unlikely), whatever you can take advantage of, you get to keep.
Loss-carry back rules will be abolished in conjunction with the mining tax but you can utilise these measures until the law changes. The loss carry back rules offer a way for many businesses to offset tax they have paid in previous years against current year losses. So, if your company is likely to be in a loss position for the 2013 income year and paid tax in the 2012 income year, we encourage you to send in your tax return information as soon as possible as the company may be entitled to a cash refund from the ATO.
For small business, if you need to buy depreciating assets in your business – computers, machinery, cars, etc., – then the there is currently an upfront write-off of $6,500 per item up for grabs between now and when the law changes.
Currently, if your business qualifies as a small business and can access the simplified depreciation rules, any depreciating assets you buy below $6,500 can be written off in the year of purchase. If your business is registered for GST the $6,500 is GST exclusive, if not, the $6,500 is the GST inclusive amount. The write off will potentially reduce back to $1,000 when the law changes.
It's also worth noting the likely impact on business when and if the Carbon Tax is abolished. The Government has already warned that fines of up to $1.1m will apply to entities "that introduce or maintain price increases, surcharges attributable to the carbon tax."
So, If your business ever published any sort of commentary blaming the carbon tax for your price increases – and let's face it, there was a stage there when the Carbon Tax was blamed for just about everything short of the high level of teenage pregnancy in Australia - then you might want to pay attention.
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Last updated October 2013. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.