Attention tradies! As tax time approaches, there are some things you can claim that could be of huge value to your business.
If you missed this years budget announcement we don’t blame you. Fortunately finder.com.au is here to help you catch up. So what was new this year and how will it affect tradies?
Well, the big news was the announcement of a tax claim that can be made by small business on purchases of up to a staggering $20,000. This means that business turning over less than $2 million per year, can claim for 100% of the cost of pieces of equipment that are vital to their business, with a value of up to $20,000 and you can claim for as many purchases as you like until June 2017.
So I can get things for free?
No, sadly not. You may be able to claim the cost of items to reduce your effective tax rate, but you’ll still have to pay for the items upfront. So remember to only buy things that you know you can afford.
What you can claim?
Claims must be things that are relevant and necessary to your business, and directly relate to your business earning income. So, unless you’re in the man-cave fitting business, the pool table might be a stretch. But it’s really handy for machinery, tools, some electronics, even vehicles. If there are things that you often find yourself hiring, or if you need to upgrade some of your stuff, now is a good chance to do it.
Some items you can claim
Keep in mind though that this is a tax claim, it isn’t a refund. So you’ll still have to buy the equipment upfront, and you won’t get any of the money back. It’s a way to reduce your tax bill, not a way to get free stuff. So try only to buy things that you can afford and that you genuinely need.
Frequently asked questions
Can I claim whatever I want?
No. Your claims can only be on items that are necessary for the growth of your business. This will vary depending on your business, of course, but should usually be self explanatory.
I’m not a tradie, can I still claim?
If you run a small business of any kind you might be entitled to make claims on your purchases, providing they fit certain guidelines.
Can you help me with my taxes?
Sadly not. finder.com.au is a comparison website and as such we do not provide any financial assistance or advice. If you are looking for help with your taxes though, we have previewed some of the largest and most popular tax services available in Australia. You should see a list on the left hand side of this page.
DISCLAIMER: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information applicability to their own particular circumstances.