Beware tax concession traps: H&R Block
Small businesses should be wary of “bending the rules” to capitalise on the government’s newly proposed tax deduction, says H&R Block.
Earlier this week, the federal government announced $5.5 billion of budget measures for small businesses which include a 100 per cent tax write-off for assets purchased that cost less than $20,000.
However, H&R Block, while welcoming the proposals, said the generous tax break is likely to tempt some business owners to make mistakes and others to bend the rules in order to claim the deduction.
“The generous nature of this tax break means that some will be tempted to bend or break the rules in order to claim the deduction,” a statement from H&R Block said.
“The Australian Taxation Office will be watching closely and will no doubt devote compliance resources to checking these claims,” the accounting firm said.
Small business owners should not let the generosity of the tax break “override their commercial instincts”.
“This tax break is ideal for those businesses which were planning to purchase assets anyway or have a real business need to invest,” the statement said.
“There’s no such thing as free money. You have to spend a dollar to get 30 cents back (or 28.5 cents after 1 July) so make sure those capital purchases fit with your overall business plan,” H&R Block said.
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