CPA accountant and tax expert Coco Hou is urging businesses to speak to their accountant immediately to find out about the new tax breaks and write-offs starting in the new tax year.

“Businesses need to act quickly,” recommends Hou. “There are a number of new tax write-offs coming into effect from 1 July this year, but importantly, there are also a number of write-offs that are coming to end on 30 June.”

Hou, who is the managing director of Platinum Professional Training, a national training provider for the accounting and bookkeeping industry, and Platinum Accounting Australia, a national network of accounting and bookkeeping businesses, says it’s vital that business owners speak to their accountant as a matter of urgency to ensure they are prepared.

“If they don’t, they could be severely disadvantaged financially,” she says.

“The current tax break scheme ends on 30 June, but the good news is that Australian businesses could soon be claiming up to $20,000, according to the Small Business Energy Incentive announced by Treasurer Jim Chalmers, Climate Change Minister Chris Bowen and Small Business Minister Julie Collins.

“The new tax breaks, which begin on 1 July 2023, will relate to businesses that purchase energy efficient fridges or link their heating and cooling to solar energy.”

Changeover at 30 June 2023

“This new incentive, running from 1 July 2023 to 30 June 2024, will allow Aussie businesses to claim $20,000 on tax but depreciate it over the life of the item. The scheme is expected to cost $314 million over three years and help 3.8 million small and medium-sized businesses right across the country,” Hou reveals.

“Similarly, if you are wanting to take advantage of the current instant asset write-off scheme that’s been popular with tradies making claims on asset purchases in one year rather than eight, time is ticking away because you only have until 30 June.”

Better breaks for small businesses

“In addition to this, small businesses with a turnover of less than $50 million that make a switch to renewable energy will also be eligible for a 20 per cent tax deduction in relation to the cost. So if you invested $10,000 on an asset, you could actually write off $12,000,” Hou explains.

“With the goal of helping businesses become more energy efficient and environmentally sustainable, this tax write-off applies to small and medium enterprises to encourage these businesses to install solar panels and electrify their cooling and heating, install batteries and heat pumps, and invest in induction cooktops to replace gas. The maximum bonus tax deduction is $20,000 per business.”

Long-term benefits

“This tax write-off is definitely a boost to many small businesses that have been seeking to make changes but have been struggling to cover the upfront costs,” Hou says. “But further to that, there are medium and long-term benefits of helping these everyday Aussie businesses bring down their energy bills. This amounts to thousands in accrued savings for small businesses over a long period of time.

“And of course, there is the undeniable environmental benefit of swapping out polluting energy sources for renewable electric versions. It’s a great way to ensure that small businesses are encouraged to do their bit for the planet.”

The importance of your business accountant

“The changeover in government schemes really highlights the role of your business accountant because they are responsible for keeping tabs on the latest industry news, which includes any changes in schemes. They can then make recommendations that would be of benefit to your business,” Hou recommends.

“Remember that accountants are not just there to help with your tax obligations but they also assist in looking out for potential cutbacks and bonuses that they can bring to your company.”

Want more? Get our newsletter delivered straight to your inbox! Follow Kochie’s Business Builders on Facebook, Twitter, Instagram, and LinkedIn.

Now read this:

https://www.kochiesbusinessbuilders.com.au/small-business-energy-incentive-to-deliver-314-million-extra-deductions-to-businesses/