$30,000 instant asset write-off

Are you thinking of purchasing assets for your business?

In a recent move, the government has increased the instant asset write-off from $25,000 to $30,000 for businesses with a turnover of less than $50 million.

This means if you purchase an asset (new or second hand) costing less than $30,000 and it is used or installed ready for use from 7:30pm AEDT on 2 April 2019, you can claim a deduction for the business portion up until the cut off on 30 June 2020.

However, different thresholds apply for assets purchased before that date:

  • From 29 January 2019 until before 7.30pm AEDT on 2 April 2019, the threshold is $25,000
  • Before 29 January 2019, the threshold is $20,000.

You may purchase and claim a deduction for multiple assets provided each asset is under the relevant threshold.

Assets costing $30,000 each or more can’t be immediately deducted, but you can continue to deduct them over time using the small business pool.

When claiming business expenses, ensure it is at the GST exclusive rate if you are registered for GST, not the GST inclusive rate.

If you have any questions about writing off business assets then just get in touch.

Single Touch Payroll

On February 12, the government passed legislation that requires even the smallest of employers to electronically file each pay run with the ATO using Single Touch Payroll (STP), starting from 1 July this year.

What you need to know

If you’re reporting through STP you no longer need to:

  • Provide payment summaries to your employees for amounts reported and finalised through STP — employees will get an ‘income statement’ through myGov instead.
  • Lodge a payment summary annual report to the ATO for amounts reported through STP, as long as you complete the finalisation declaration by the due date.
  • You have until 31 July to finalise your employees’ STP information by making a finalisation declaration through your STP-enabled solution.

What to tell your employees

When claiming business expenses, ensure it is at the GST exclusive rate if you are registered for GST, not the GST inclusive rate.

At the end of the tax year, they receive an income statement in their ATO online services account (through myGov) for the amounts you have reported through STP.

If they use a registered agent to lodge their income tax return, their agent will be able to access all their STP information.

When their income statement is tax ready they’ll get a notification in their myGov Inbox, although they should wait for this to occur before they lodge their tax return.

You can learn more about Single Touch Payroll on the ATO website.

Work out what business expenses you can claim

Did you know that the Australian Tax Office (ATO) is set to focus on small business tax returns this year, in order to crack down on the misreporting of income and expenses?

Make sure you know exactly what type of business expenses you can claim by following these three golden rules.

  1. The expense must have been for your business – not for private use.
  2. If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.
  3. Make sure you have the right records to prove your business expenses.

Tips for claiming business expenses

When filing your tax return, do not include expenses such as private rent, fines, travel, food, or renovations of a private residence as part of your business expense.

When it comes to upgrading your accounting software, ensure the business and private expense codes are correct, as you must apportion the cost of the software if you also used it for other purposes.

When claiming business expenses, ensure it is at the GST exclusive rate if you are registered for GST, not the GST inclusive rate.

If you operate your small business as a company or trust, paying private expenses from these accounts may have other tax implications such as fringe benefits tax and shareholder loans.

If you’re not sure what to claim, call us on 0407 236 103. We look forward to hearing from you!