Car claims for Geelong small businesses
We all know tax and wheels cost you money… But how much can it cost and how much can you save?
As of 1st July, 2018, there are changes to car threshold amounts that may apply to you and your Geelong small business.
When working out the depreciation for the portion of business use of your car, you use the car limit that applies to the year you purchased or leased the car. The current upper car limit for 2018-19 is $57,581.
Goods and services tax (GST)
When purchasing a car, you can claim one-eleventh of the car limit amount if the car cost more than the car limit (as long as the car is solely for business use).
GST cannot be claimed for any luxury car tax you pay when you purchase a luxury car, regardless of how much you use the car for your business.
Luxury car tax
As of 1 July 2018, the tax threshold for luxury cars has been increased to $66,331.
The tax threshold for fuel efficient luxury cars like a Toyota Prius, for the 2018-19 financial year remains at $75,526.
A car’s value includes any parts, accessories and/or attachments supplied and/or imported at the same time as the car was purchased.
If you purchased a car before 30 June and it cost less than $20,000, you can write off the business portion in your 2018 tax return.
Originally, the $20,000 limit was only available to 30th June 2018. In the latest Federal Budget, there was a proposal to extend the $20,000 instant asset write-off threshold to 30 June 2019. This change is not law yet.
If you are unsure of your GST or tax obligations, Next Level Accountants, located in Geelong, can discuss what may or may not be relevant to your Geelong business.