The Institute of Public Accountants (IPA) is reminding small businesses to take advantage of the current small asset write off threshold before it plummets on 1 January.
The small asset threshold will drop from $6.5k per asset to $1k, as part of the repeal of the Minerals Resource Rent Tax (MRRT).
The IPA is encouraging small businesses to do some “asset Christmas shopping” as next year small businesses will need to factor a slower tax payback period, said chief executive Andrew Conway.
“You will need to buy before 1 January, 2014, to get the full tax deduction for assets costing less than $6,500. The extra accelerated depreciation claim of $5,000 for motor vehicles will also be scrapped.”
Conway said an “unfortunate casualty” of the MMRT repeal is the scrapping of the loss carry-back initiative after its short, one-year lifespan.
“The loss carry back changes were mainly intended to give viable small businesses a boost when they need it the most through more timely tax loss relief.
“This had been the major shortcoming of the tax loss treatment rules for small corporate businesses; the inability to claw back previously paid taxes and having to wait to earn profits before they could recoup their tax losses.”
IPA wants the Government to review its decision to reverse the repeal of the loss carry-back initiative.
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