SMBs Have Weeks To Benefit From Mining Tax Concessions Before They Disappear

Mining giants have welcomed government moves to axe the Australian Labor Party’s minerals resource rent tax (MRRT) but with it, goes some $4 billion of small business tax concessions to be funded by it.

Taxpayers Australia this week warned that SMEs had until 1 January to benefit from capital allowance concessions, which provide an immediate tax deduction for any business plant and equipment costing under $6,500, and an immediate deduction of the first $5,000 plus 15% of any additional value of a motor vehicle.

The remaining value is allocated to a small business general pool, to depreciate at a rate of 30% in subsequent years.

As of 1 January, laws will be amended to bring the $6,500 threshold down to $1,000, and the immediate deductions for motor vehicles will no longer apply.

“Eligible small businesses should make any planned capital expenditure in line with their Christmas shopping and not the stocktake sales,” Taxpayers Australia’s head of taxation products and services Mark Chapman said.

“An increased deduction will only be available if the small business takes possession of the asset and uses it in business before the end of the calendar year.

“At the very least, the asset must be ‘installed and ready for use’ even though it may be intended by the business that the asset be used in the New Year.

“If you’re planning to buy a car, you should take one from the lot. Waiting for the car to be delivered in 2014 means you will lose out on accelerated deductions.”

A raft of other mining-tax-related changes will come into effect on 1 July, stopping companies from being able to carry their tax losses forward as a future deduction, and delaying the compulsory superannuation increase by 2 years.

The MRRT cut will also see the end of the government’s low-income superannuation contribution, income support bonus and schoolkids bonus.

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