We don't usually think of the Federal Budget and the Treasurer as Christmas and Santa Claus, but that's exactly how the 2015 Budget looks to small business. For those who have been too busy to read, the headline items are the immediate tax write-off, a cut in the tax rate, increased Fringe Benefit Tax (FBT) exemptions and some reductions in red tape, and there are a number of other smaller changes.
The showpiece is the $20,000 immediate tax write-off for purchase of any business asset, starting right now and for the next two years. This 100% write-off is available to businesses with an ABN, earning less than $2 million in revenue, and covers a broad range of items such as cars, fridges, coffee machines, tables and chairs, printers, hot water units, computers and packaged software.
The effect of this was seen immediately, when shares in Harvey Norman promptly rose 5%! JB Hi-Fi, Wesfarmers, Woolworths and Myer quickly followed suit. Obviously investors in those companies think that small businesses are going to be out there buying up big, and the big box retailers are going to benefit.
While we think it's a great idea to buy a new coffee machine and some nice shiny new chairs for the boardroom, it's a better idea to invest in things that help you run your business better.
Mobileezy software is a case in point. Manually tracking orders, sales, stock and deliveries means lots of paperwork and lots of labour, as well as lots of errors and rework - Mobileezy is designed to automate those common processes, reduce labour and avoid errors and rework. While Harvey Norman will be very happy to sell you a coffee machine and some chairs, we think that what the Government had in mind was investment in assets that make money and run your business better, not just in creature comforts.
It's not just for a whole new system. In the past a single Mobileezy handheld device licence or a single device would be over the $1,000 immediate depreciation limit, and can now be bought for an instant tax write-off in the current year. For any customers thinking about adding a device or two, now is a really good time.
The FBT changes are another factor. There have been some restrictions on the purchase of things like phones, tablets and other devices that might see some personal use. With the new rules a whole slew of devices are now exempt. Time to place those orders!
Just one note of caution: everything in this article should apply in most cases, but this is no substitute for getting your own professional advice. Tax can be complicated!
So listen to what Joe Hockey is telling you, and get out there and invest in your business. We're ready to take your orders!