New tax breaks for small business
Posted on Monday 26th March 2012
Need a car? If you’re in small business the Government thinks you do. Spreading some joy prior to the Federal Budget, Treasurer Wayne Swan has announced an immediate tax write-off for small business of the first $5,000 on the cost of a new car used for work purposes. However, the tax write-off is not scheduled to start until the 2012/2013 financial year, so we hope you did not need that car now. The write-off is in addition to other previously announced incentives for small business operators due to start in 2012. These include:
- an immediate write-off of all assets valued at under $5,000 (up from $1,000 presently);
- a write-off of all other assets (except buildings) in a single depreciation pool at a rate of 30%. Currently, small businesses allocate assets to two different depreciation pools, with two different depreciation rates (30 per cent and five per cent); and
- a reduction in the company tax rate to 29%.
- The write-off for cars will replace the current entrepreneur’s tax offset that provides a 25% tax offset on business income where income is between $50,000 and $75,000.
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