My wife and I are about to start a new small business where we will be required to buy a dual-cab ute and a catering trailer.
Both these will be primarily used for the business. I am also considering converting part of my garage into a food preparation area which is also for the business.
As yet we have not registered a business but due to the incentives it may be a good idea to do it now rather than later on with the tax breaks. As we are both new to this, can you tell me if we are eligible for the 50% or 30% tax breaks?
This is something that you should get specific advice on. You probably need to engage an accountant, if you don’t already have one, to give you some advice specific to your circumstances.
In principle, you can still claim the investment allowance if your business has not commenced but you are purchasing the assets to be used primarily in the business. The issue goes to being able to establish that you are in the process of commencing a business.
Indicators such as a business plan, arrangement of finance and starting to put in place some of the business requirements would all go toward this. Ultimately it is tested on the facts – case by case.
Where you are only commencing the business and assuming that initial revenues are estimated to be below $2 million per annum then you would be entitled to the 50% investment allowance level. As you only have limited time left for this year I’d suggest you get some specific advice as soon as possible.
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
