New laws have passed that allow small businesses to claim an immediate deduction for assets they start to use – or have installed ready for use – provided each item costs less than $20,000. This will temporarily replace the previous instant asset write-off threshold of $1,000.

If you maintain a general small business pool, this can be immediately written-off if the balance is less than $20,000.

Assets that cost $20,000 or more (which can’t be immediately deducted under other provisions) are deducted over time using the general small business pool. Under the pooling mechanism a deduction for 15 per cent of the cost is allowed in the first income year with a diminishing value rate of 30 per cent deduction on the opening pool balance allowed for each income year thereafter.

This measure starts 7.30pm (AEST) 12 May 2015 and will end on 30 June 2017.

Come and talk to us on how to tax effectively purchase and make investments in your small business.

Most of my articles to date have concentrated on small business owners. So here’s one for those who are employed.

As most of you know I’ve worked in the salary packaging industry for a number of years so I’ve seen and implemented a fair number of salary package benefits to know what works and at what income levels. Keep in mind that tax savings are culminating. A $50 a week saving here and there adds up through the course of a year.

So these are my top 5 in order of least to most tax effective:

5. Car parks – for some of you who are unfortunate enough to have to pay for parking at work. It’s a little known fact that there is a small saving to be had, usually around $20-30 a week, to salary package car parking due to the concessional valuation rules for car parking.

4. Cars – on the subject of cars, salary packaging cars is one of the most popular perks. Having a novated lease through your employer mean not only do you save on your tax but also the GST on purchasing and running your car. Further, you don’t have to prove business use.

3. In-house dining – if your work has an in-house dining facility whether they be a canteen or third party cafe you can salary package the cost of lunch as these are considered income tax deductible.

2. Superannuation – salary sacrificing super is effective as the ATO consider these as payments made by the Employer. However before you do this just check with the employer as some count this towards the superannuation guarantee limit.

1. Health workers and those in charities/PBIs – workers in these organisations get special dispensation from FBT in the form of either a rebate or exemption. So for example an ambulance worker can sacrifice their rent, school fees up to a certain limit and not be subject to FBT.

 

So as you can see from above there are still lots of things you can do with your salary in order to effectively give yourself a pay rise without actually getting a pay rise.

And always check with your accountant before getting yourself into one of these arrangements as your mileage will vary.