A staggering 85 per cent of small business owners in Australia are missing out on a $20,000 tax break, a new study has revealed.
The $20,000 instant asset write-off scheme lets small businesses claim an immediate tax deduction on all capital purchases up to $20,000 per item. It can be applied to items including cash registers and POS devices; store fittings and fixtures; computers; in-store security systems; and accounting software.
A survey conducted by Officeworks and H&R Block found that although the instant asset write-off has been extended by the government into FY19, a lack of understanding and education has stopped small business owners from maximising their tax returns.
Mark Chapman, director of tax communication at H&R Block, says the scheme has been a great boost to those who have used it.
“When it comes to tax, there’s a perception among small businesses that it’s always bad news—more red tape, more compliance, more money to pay to the Australian Taxation Office,” he says. “In reality, sometimes the tax system can work to the advantage of small business and the $20,000 instant asset write-off is a classic example of that.”
According to the survey, 25 per cent of small business owners blamed a lack of organisation and time for not using the tax break.
Officeworks head of technology, Sandy Young, says the retailer has partnered with H&R Block to develop an online tax deduction estimator, to help businesses understand the deductions they could be claiming.
“We’re surprised to see so many small businesses still not aware of or utilising the $20,000 instant tax write-off,” she says. “With H&R Block’s help, we’re spreading the word about the opportunities available for small business owners, to give them a boost coming into FY19 and beyond.”
To use the tax deduction estimator, head to officeworks.com.au/EOFY