Up until June 30th 2017, eligible small businesses can claim a 100% tax deduction of assets acquired with a value of $20,000. And that $20k is ex GST, so if you’re buying a new or used car, a piece of machinery or equipment for business use, the value can be $22000 including GST. For car buyers, the $20,000 is also before on-road costs and dealer delivery, so again it’s a net $20,000.
There’s any number of vehicles that fall into that category:
Passenger vehicles
Ford Fiesta/Focus
Holden Spark/Barina/Cruze
Honda Jazz/City/Civic
Hyundai Accent/ I20/ I30
Kio Rio/Cerato
Mazda 2/3/CX3 Neo
Mitsubishi Mirage/Lancer
Nissan Micra/Pulsa
Peugeot 208 /308
Proton Previa/Suprima
Renault Clio/Megane
Skoda Fabia/Rapid
Subaru Impreza
Suzuki Celerio/Swift
Toyota Yaris
Volkswagen Polo/Jetta
Commercial Vans
Citroen Berlingo
Fiat Doblo
Suzuki APV
Commercial Utes
Foton Tunland
Great Wall Single Cab
Mahindra Pik-Up/Genio
Nissan Navarra
Tata Xenon
Toyota Hilux
Of course, most of the vehicles listed will be their entry level model probably with manual transmission, but be on the look-out for end of financial year deals from most manufacturers.
And if you’re very clever, you’ll let me negotiate a deal for you and you’ll be surprised at how much I can save you over and above the ‘specials’ on offer.
Call me on 0418 748 498 or email to [email protected]au
“Small businesses can claim a deduction for individual assets that cost less than $20,000.
The changes mean you can claim a deduction for:
- each asset costing less than $20,000 (ex gst)
- new and second-hand assets
- assets acquired after 7.30pm on 12 May 2015
- assets acquired up until 30 June 2017 when the threshold will return to $1,000.
The tax concession is only available if you use the car in running your business. Note that if you purchase a car in the business name and the car is used by any employees, you may have to pay fringe benefits tax (FBT).
What information do I need to keep?
Keeping a log book is the best way to prove that you are using the car to run your business, and can reduce the amount of FBT payable. You should detail all business travel for a period of at least 12 consecutive weeks showing:
- dates of travel
- odometer readings at the start and end of any trips
- the kilometres travelled, and
- the reason for the trip.
For FBT purposes, you may also need to keep odometer readings at the start and end of each year, along with details of the operating costs for the car.
Things to keep in mind
- Be aware that home-to-work travel is generally considered to be private travel.
- Where a car is garaged at or near an employee’s home, the ATO considers the car to be available for the employee to use, regardless of any actual private use.
- Company directors are generally treated as employees. So if the company owns the car, and the directors use the car for private purposes, then FBT could also apply”.
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