It’s hard to believe, another financial year is rapidly drawing to a close. Can you believe it? Perhaps you’re truly starting to appreciate all those boring words of wisdom your parents espoused back in the day, about the way ‘life just seems to pass quicker as you grow older’. Whether or not you are approaching tax-time with a level of incredulity, and ruing the work it can involve, there are some positives to be gleaned, particularly if you are a small business weighing-up tractors for sale and whether now is the time to invest.
Just last month the Federal Government confirmed it would continue its highly-popular tax write-off for equipment purchases valued up to $20,000 to small businesses with an annual turnover of up to $10 million. The measure was initially announced in the 2015-16 Budget, but it only applied to businesses with a turnover up to $2 million. Put simply, the measure allows small businesses to claim an immediate deduction for each asset purchased, such as a new or used forklift, as long as it costs less than $20,000 and is purchased before June 30, 2017.
With this in mind, perhaps now IS the time to update your tired machinery. Perhaps you can afford to invest in that impressive tractor for sale you saw in the yard last month at Safelift Solutions, or even the used wheel loader sitting next to it or the Victory Equipment Parts you’re confident would help improve your daily business productivity.
Figures from the Tractor and Machinery Association released earlier this year showed a significant increase in purchases of equipment on-farm since the inception of the equipment tax break but it’s not just farmers who should be taking advantage of the measure. Whatever your small business — from landscape gardening to construction earth-moving — if you’ve had any thought for purchasing machinery, like a new forklift, used forklift or the latest front end loader you saw for sale, consider you tax options wisely as a legitimate means to your end.
Having said all of that, it must be acknowledged not all small businesses are in a position to take advantage of such concessions. To avoid tax you’ve got to be paying tax. If your business is not making money (or enough money) then a tax deduction like this one is of no use to you. This measure is ideal for sufficiently profitable small businesses that were already genuinely weighing-up the purchase of assets or have a real need to update equipment. The concession is not a grant or allowance and it’d be very unwise to take on any unnecessary debt in order to achieve a tax deduction. As always, no matter how much you want that quality used tractor, or how you justify your desire for a new forklift, you must seek professional advice from your accountant or tax-agent if you’re planning to invest with a view to offset tax. And keep in mind, it’s a safe wager that the Australian Taxation Office will be keeping a very close watch on all equipment concession claims made until the July 30 cut-off next year.