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Tax changes worth noting 01 May 2020

There have been several tax changes recently. Some of the important ones are listed here:

·   Any asset you buy from 17 March 2020 until 17 March 2021 can be treated as an expense up to a total cost, excluding GST, of $5000. For some small businesses, this could even mean buying a car and treating it as an expense. After 17 March 2021, this threshold for writing off assets as expenses is going to drop to $1000 permanently. You should keep a record of these assets because if you sell them or take them privately their value will be added back as income.

·    The owners of commercial buildings will be able to claim depreciation again at 2% DV. No such luck for residential. Air B&B, for this purpose, is deemed to be residential.

·   At the moment, once your year-end tax works out to be more than $2500, you have to pay provisional tax. This threshold is to be raised to $5000 for the year ending 31 March 2021 or equivalent balance date.

·   If you qualify for research and development tax credits, some law changes might benefit you.

·   If you qualify for the right to a six months mortgage repayment holiday, remember the interest will still accumulate.

·   The threshold for qualifying for the business finance guarantee scheme is a minimum turnover of $250,000 and a maximum of $500,000. Also, the maximum duration of the guarantee is three years. This is money your bank could lend you knowing the Government would repay up to 80 percent of the debt if you defaulted.

 

 

There have been several tax changes recently. Some of the important ones are listed here:

·   Any asset you buy from 17 March 2020 until 17 March 2021 can be treated as an expense up to a total cost, excluding GST, of $5000. For some small businesses, this could even mean buying a car and treating it as an expense. After 17 March 2021, this threshold for writing off assets as expenses is going to drop to $1000 permanently. You should keep a record of these assets because if you sell them or take them privately their value will be added back as income.

·    The owners of commercial buildings will be able to claim depreciation again at 2% DV. No such luck for residential. Air B&B, for this purpose, is deemed to be residential.

·   At the moment, once your year-end tax works out to be more than $2500, you have to pay provisional tax. This threshold is to be raised to $5000 for the year ending 31 March 2021 or equivalent balance date.

·   If you qualify for research and development tax credits, some law changes might benefit you.

·   If you qualify for the right to a six months mortgage repayment holiday, remember the interest will still accumulate.

·   The threshold for qualifying for the business finance guarantee scheme is a minimum turnover of $250,000 and a maximum of $500,000. Also, the maximum duration of the guarantee is three years. This is money your bank could lend you knowing the Government would repay up to 80 percent of the debt if you defaulted.

 

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