One of the big announcements from last week's budget was the range of incentives for small business to go out and invest. The one incentive that attracted the most headlines was the $20,000 instant asset write off. So what does it mean for us in the hospitality industry? How does this incentive work and is now the time to look at purchasing new assets like a POS system?
What is it the small business instant asset write off?
The instant asset write off for small business allows you to write off any asset purchased up to a $20,0000 threshold against your taxable income. This deduction has no limits so it can be claimed for as many asset purchases as your business makes under the threshold. This incentive came in to effect on budget night last week and is due to run until June 30, 2017.
These new tax rules are being seen as a big win in the small business sector because previously the asset write off was capped at $1,000. So for example if you purchased a ViViPOS machine starting at $3499 before the budget you would have to spread the tax deduction over a number of years. Now you can claim the full amount in one hit.
These new tax rules are being seen as a big win in the small business sector because previously the asset write off was capped at $1,000. So for example if you purchased a ViViPOS machine starting at $3499 before the budget you would have to spread the tax deduction over a number of years. Now you can claim the full amount in one hit.
Is your hospitality business eligible?
To be eligible to claim the instant asset write you need to be a registered small business. The easiest way to be able to prove this to the tax office is your quarterly BAS statements or by having an ABN. Your business also needs to have a turnover of $2 million or less.
What assets can be purchased?
Your hospitality business can purchase any asset that directly relates to you running your business. The asset can be new or second-hand and includes things like appliances, furniture and IT equipment like a new computer or POS system.
What can't I purchase?
While the instant asset write off covers most asset purchases there are restrictions:
- Horticultural plants and software developed in-house cannot be claimed (software purchased for the business like the ViViMobile App can be claimed though)
- Assets must be physical items
- To claim the deduction the asset must be purchased outright. Any assets acquired through hire-purchase or leasing are not deductible.
- If you purchase an asset that is worth more than $20,000 then it is not eligible for the tax deduction straight away. Instead it will be depreciated over a number of years, 15% in the first year and 30% for every year thereafter.
Is it time to upgrade you POS system?
For small business that are already operating or those that are thinking about starting, there hasn't been a better time to purchase a new asset like a POS System.
The ViViPOS system is designed especially for those small business running a cafe, restaurant or retail outlet. It has a range of customisable features, over 20 different kind of reports to ensure your business is tracking how you want it to be as well as an intuitive interface and systems that will make you a more efficient business operator.
We are happy to provide an onsite visit to assess your needs or you can get in contact via our website and we will be in touch.
The ViViPOS system is designed especially for those small business running a cafe, restaurant or retail outlet. It has a range of customisable features, over 20 different kind of reports to ensure your business is tracking how you want it to be as well as an intuitive interface and systems that will make you a more efficient business operator.
We are happy to provide an onsite visit to assess your needs or you can get in contact via our website and we will be in touch.
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