If you own or manage a small business – with an income of under $10 million – then investing in a solar power system for the premises may be extra beneficial to you over the next few years. You’ll not only generate some of or all your electricity, but you could claim the amount you invested in your system as a depreciation asset under the Australian Tax Office’s (ATO) 2015 Federal Budget small business concessions.
You must have installed the system before June 30 2018, though…
This tax incentive means you can immediately – that is in 2018’s tax return – deduct the full cost of any depreciating assets that cost less than $20,000. These assets must have been bought, used or installed and ready for use from 7.30pm (AEST) from May 12, 2015 to June 30, 2018.
These assets, according to the ATO, can be lots of items – furniture, computers, vehicles and less-tangible investments like mining rights and software licences. Solar power and solar water heating systems also come under this umbrella and as most systems cost less than $20,000, tax deductions are available on them.
It’s not just businesses that are eligible
Anyone with an Australian Business Number (ABN) is eligible for the depreciating asset tax deduction. This includes micro-businesses and sole traders, too.
Many micro-businesses and sole traders run their enterprises from their homes or from a garden office, so it’s a bit more complicated to work out the tax deduction in these cases. If you run your business from your home, you’ll still be eligible for a portion of the deduction, but you’ll need to speak to your tax adviser to find out the exact proportions and amounts.
It’s always a worthwhile investment
However, no matter what the size of your enterprise is, when you think about how much you’ll be saving on electricity (especially if you work from home during daylight hours…) with your solar system, you can’t fail to benefit from the incentive!
