David Flynn16 December 2009, 11:18 AM
If you’re nominally running a small business – even as a sole trader – you’ve got just two weeks to pick up a new PC or associated hardware and claim a 50% tax rebate.
Looking for one last justification to spring for a new desktop, notebook, netbook, flat screen monitor, home server or other piece of kit?
The impending end of the Federal Government’s Small Business Tax Break scheme could be the answer.
Created as part of the federal government’s overall anti-GFC measures, it allows small businesses with a turnover of less than $2 million a year to quality for a 50% tax deduction against the cost of eligible new assets purchased between 13 December 2008 and 31 December 2009.
Translated into plain English, this means that anyone running what could be described as a small business – even a one person operation – can gear up with new PC hardware (but not software or services) and claim back half of the cost as a tax deduction in their 2009-2010 return next June.
There are some pretty basic caveats. The minimum spend s $1,000, although the ATO allows that “the cost of items forming part of a set and the cost of identical or substantially identical assets may be added together for the purposes of meeting the thresholds”.
In other words, a netbook alone won’t get you over the line but you can bundle together a netbook, 11n wireless router and USB backup drive – or a similar array of relatively low-cost items – to be counted as a single installation.
While the ATO states that eligible assets “must be used for the principal purpose of carrying on a business” this still leaves a little wiggle-room for some products such as a wireless network or a central home server to be shared with other members of the household, as long as your business is clearly the primary user of the hardware.
For the best advice and hard details on the Small Business Tax Break, APC suggests you contact your accountant – and pronto!