This is not the usual end of financial year rush. The Treasurer wants you to buy for your early childhood business and there could be $20,000 in it if you are eligible. But hurry. The new tax law announced in Budget 2015 applies for a limited time. And the first opportunity to use it ends on 30 June 2015.
The new measure helps eligible early childhood small businesses purchase items that are directly business-related. While the Australian Taxation Office (ATO) calls it accelerated depreciation and refers to assets and eligibility, in plain talk this means ‘physical items’ only—devices, tools and other equipment (but not software, indoor plants and other excluded items).
It’s a great opportunity to buy the tablet, laptop or even sit-to-stand desk for the office that you have been eyeing off in the catalogues (online catalogues, of course!).
To be eligible for the accelerated depreciation you have to have an Australian Business Number and an annual turnover below $2 million. Some centre-based early childhood services and family day care educators will be eligible.
But don’t take our word for it … check the ATO site or ask your accountant.
What the ATO says
The ATO’s Small business page has some curiously specific details. For instance accelerated deduction applies to assets purchased between 7.30pm on 12 May—the exact timing of Budget 2015—and 30 June 2017. According to the ATO:
You’ll be able to immediately depreciate any eligible asset costing less than $20,000 which you buy from 7.30pm on 12 May 2015 until 30 June 2017. This means you’ll be able to deduct the assets in the financial year in which you first use or install the asset. There is no limit on the number of eligible assets costing less than $20,000 that you can immediately depreciate, but you need to buy them between 7.30pm on 12 May 2015 and 30 June 2017 (from Australian Taxation office, http://www.business.gov.au/small-business/Pages/jobs-and-small-business-package.aspx, sourced 24 June 2015).
What do you say?
Don’t buy tech for tech’s sake. Yet you may have been considering a device for your early childhood practice and lacked funds to purchase. (If you need some ideas have a look at Live Wires Online or Live Wires magazine—remember though that software is excluded.) Check with the ATO or your accountant about the eligibility of tech options you may be thinking about such as:
- air printers to synch with the tablet devices your early childhood service is using
- tablets (and the air printer) that until now you have been unable to provide for educators and groups of children
- pocket devices and smart phones—to play music, store photographs and text between rooms using your own wifi network. I’m thinking of Apple’s ipod but Android devices such as Samsung’s Galaxy Player have many smartphone features without the phone and allow local wifi network texting
- 3D printers—what do you think of these for creative play?
- recording and mapping devices—digital cameras, GPS navigators, audio recorders and camcorders to get children observing, making and doing rather than passively watching
- large screens—televisions, smart tables, smart boards and home theatres to play back, connect to the internet, download and display
- business support tools such as beacon devices that allow automatic scanning (to augment or replace sign in), computers and laptops equipped with cameras (or add the camera) for video conferencing, distance learning and remote teams, or consider dedicated web conferencing equipment.
Software is not included but as the mantra goes, it’s not about the app: ask what the device can do. So for this year’s tax time, ask: what device would do it for your early childhood service?
Now is the time to act. And even if you don’t have time this year, start planning for next. Accelerated depreciation expires on 30 June 2017.
This was originally posted on Digichild.