Our CFO Greg Taylor gives small business people a reminder about changes to depreciation of assets, lets them know they can pay their tax bills with a credit card and that they have an extension to complete their BAS if they lodge quarterly.
Do you read the newsletter that you receive with your Business Activity Statement (BAS)? They are worth checking as they contain some handy tips on tax and making sure you are properly fulfilling your tax obligations. You don’t want to be doing the wrong thing by the taxman. The ATO website (www.ato.gov.au) has these newsletters and other handy tips too.
The latest one had a handy reminder about some beneficial changes to small business depreciation claims this year.
You can now claim (write off) an outright deduction for most depreciating assets purchased that cost less than $6,500 each. This has increased from $1,000. If you buy two or more assets each costing less than $6,500 you claim the deduction for each of them.
From 2012-13, if you buy a motor vehicle for use in your business, you can claim an immediate $5,000 deduction. The remainder of the cost is deducted through the general small business pool at 15 per cent for the first year and 30 per cent for later years.
If your assets are worth $6,500 or more they can all be pooled with other assets (regardless of their effective life) and deducted at a single rate of 30 per cent. The exception is newly acquired assets which are deducted at 15 per cent (half the pool rate) for the first year. Long life pools no longer exist. The closing balance is to be rolled over to form part of the opening balance of a general pool to be depreciated at a rate of 30 per cent instead of 5 per cent.
Did you know that you can also make tax payments by credit card? This may help with cashflow. Beware there is a small credit card payment fee.
Those of you paying your BAS quarterly, remember you get a Christmas extension courtesy of the ATO. It is not due until February 28.
This post is from Greg Taylor's weekly Business Finance Column in the Newcastle Post newspaper.
Have you got any other tax and BAS tips to share?