The new changes will also affect taxpayers renting out holiday homes for only a few weeks of the year, then claiming a $30,000 deduction. Entrepreneurs who regularly use these concessions should move quickly; they won’t be able to use them again.
Peter Bembrick says that bad debts should be written off before the year’s end. “Anything that can be written off should be looked at before year’s end.”
Bembrick also warns that companies undergoing acquisitions and mergers and are hoping to write off bad debts need to qualify under the ATO’s continuity of ownership test.
“Just be aware that the ATO has tended to take a very narrow view on what the business is, in terms of definitions under the test. If businesses are contemplating reconstructions or mergers, just be aware of what losses there are and if they may fail the test as a result.”
Marc Peskett, partner at accounting advisory firm MPR Group, says there are a lot of opportunities to take advantage of for the Government’s research and development tax concession.
“To be eligible to claim the tax concession, companies must put an R&D plan in place before 30 June detailing their projects for next year and how they will be funded,” Peskett says.
“This is particularly critical for businesses which are coming into their fourth year of continuous R&D claims and may be eligible for the 175% deduction, as it’s proposed that this deduction be abolished after the 2009/10 financial year.”
Mark Morris says there is assistance for entrepreneurs in the micro-business stage, transitioning from employment to owning their own business.
“Say you’ve got a person such as an office worker who is starting their own business. Currently, they’ll get a 25% rebate on the income they’ll have from that business. For 2009 that concession is not means tested. In tough times, and when people are starting out, that’s important to take up.”
Marc Peskett reminds exporters that they should be investigating to see if they are eligible for the Export Market Development Grant, which provides grants for up to 50% of export promotion expenditures.
While the lodgment date for the grant isn’t until 30 November, Peskett says businesses should use tax-time to start preparing expenditure and trip reports, and other relevant information.
“You’re eligible to apply for an EMDG if you’ve had annual income of not more than $50 million during the grant year and spent at least $10,000 on eligible export promotion activities during the grant year.”
“If you’re a first time applicant, you may combine two consecutive financial years’ expenses in the first EMDG claim to meet the $10,000 threshold.”
Peskett also says that companies with international subsidiaries involved in export market activity can be eligible, but the Australian entity must have paid for the expenses directly and show them in their financial statements.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
