The Australian Government has been helpful in the Covid19 crises, and so far announced multiple packages on how to help SME businesses.
One of them is an instant $150k Asset Write Off which came into effect in March and has been extended until 31st December 2020.
According to the ATO, an instant asset write off is an immediate write off of each asset that costs less than the threshold. Businesses can now claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use.
How does it work?
If your business’ annual turnover is less than $500 million, you are eligible to claim immediate deductions up to an amount of $150,000 for any new or second-hand plant and equipment assets purchases. That means you can purchase any equipment, any vehicle or material for your company that will help you to recover from the current situation or improve your business in the future. Don’t forget if you wish to claim an immediate portion from your purchased asset this is only allowed in the year the asset is first used or installed ready for use.
A humble note, is that if you are planning on purchasing a motor vehicle, the depreciation limit is $59,136, cars over this value are deemed by the ATO to be a luxury vehicle.
Before you make any new purchases, we would suggest checking out assets that are excluded from the government lists such as horticultural plants or simply contact us and we can assist you.
Remember we don’t charge for quick 5 minute phone calls and we encourage all of our clients to take advantage of this.
It’s important to always align your strategy with your established business plan.
Here at QC Accountants, we are ready to help you with additional details and also help you to claim the business portion of the asset’s use in your tax return for the particular financial year.
If you have any questions at all, do not hesitate to contact our team of professionals on 07 5593 6060 as we are here to help you.
The start of the financial year is a great time to review and understand the requirements of record-keeping for business. If you can stay on top of your record-keeping throughout the year, you’ll have less of a headache come tax time next year. Not only that, but sound record-keeping in your business will enable better cash flow management.
Let’s take a look at best practices of record-keeping for business, and how you can stay on track throughout the year.
Records are required wherever there’s activity relating to:
Records that relate to both business and personal use need to show which portion is relevant to the business.
Keep records that relate to your business income and expenses. You should also keep records of estimates/ methods/ calculations of your business’ tax and super affairs.
Make record-keeping a part of your daily business operations to stay organised and within legal requirements.
As a general rule, you need to keep records for 5 years from when you prepared/ obtained the record, or completed the transactions/ actions related to the record – whichever is later. There are some exceptions to this rule in individual circumstances.
It is acceptable to store records digitally, provided they are held within an encryption system, password-protected and indexed or labelled in an easily accessible way. They must be in English or easily converted to English. The ATO recommends keeping records digitally.
Bear in mind that the ATO may need to access your records, so it’s important to file and manage them in a way that the information can be easily extracted and reviewed.
As a business, you can keep your records, but working with a registered tax or BAS agent may be a viable option for you, in terms of collecting, filing, and managing your records.
QC Accountants can help by collecting and managing your records. If we also conduct your tax return it can be beneficial and time-saving if we’ve been managing your records. In any case, you should regularly verify that you’re meeting your record-keeping obligations.
The ATO has a handy record-keeping evaluation tool online for businesses.
If you’d like to discuss our capabilities for managing your records, please get in touch. We’d love to hear from you.