Tax trap warning for small business
Thursday, 2nd January, 2014
Local businesses could be worse off in the new year with the Federal Government planning to slash a tax break.
The opposition has claimed the government is setting a “tax trap” for small business by reducing an asset write-off initiative before legislation for it has passed.
Small Business Minister Bruce Billson’s office confirmed that the $6500 instant asset write-off introduced by the former Labor government was to end on January 1.
Instead, businesses will be able to get instant tax break for assets worth up to only $1000.
The tax break was linked to the mining tax, and its formal dumping is contained in the mining tax repeal bill.
That bill is still stuck in the Senate, however legislation for tax measures can be applied retrospectively.
Acting opposition leader Penny Wong said it was a “tax trap for 2.7 million Australian small businesses and sole traders”.
Shadow treasurer Chris Bowen said it was highly unusual for a government to make tax such changes and not publicise them.
“Have we seen any information campaign for small business saying ‘Listen, if you want to make an investment you’d better make it now because your tax write-off ends on 1 January?’ No,” he said.
“I don’t think they’re very proud of this change.”
Dropping the level of the instant asset write-off was part of the coalition’s election commitments.