At last Australian small business buying new IT equipment benefits from a tax break

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The Hon. Joe Hockey MP, Treasurer Of The Commonwealth Of Australia

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As part of Australian tax law since the late 1980s, companies were required to pay a fringe-benefits tax on non-cash supplementary benefits they gave to their employees. The same situation also ensnared sole-traders who chose to run their businesses as a company and buy capital equipment like vehicles or computers in the company’s name but use it for business and personal / community purposes.

This has caused various tax-compliance quagmires for all businesses but there has been some special treatment for small businesses in relationship to them buying portable computer equipment. Previously, it was seen under fringe-benefits-tax law that if a company gave an employee two computers like a “work-home” laptop and a tablet computer or ultraportable, they could only see one of these devices as FBT-exempt because they did the same function.

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Now, as part of the 2015 Federal Budget, the Australian Government have installed a tax break for small businesses with an annual turnover of under AUD$2 million by making the supply of all work-related portable electronic device not subject to FBT. This measure, which applies from April 1 2016, would allow for the supply of a regular 15”-17” laptop as a “work-home” computer along with a tablet, “2-in-1” or ultraportable, and a smartphone to an employee and the technology can be used for personal use without dealing with any further red tape.

This, along with a tax deduction for newly-purchased individual assets less than AUD$20,000, has been part of a series of measures that Treasurer Joe Hockey, who has had small-business experience through his family life, that make things easier for start-ups and small businesses.

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