{"id":31989,"date":"2023-10-20T14:26:35","date_gmt":"2023-10-20T14:26:35","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/home-based-start-ups-hit-out-at-vehicle-tax-write-off-startupsmart\/"},"modified":"2023-10-20T14:26:35","modified_gmt":"2023-10-20T14:26:35","slug":"home-based-start-ups-hit-out-at-vehicle-tax-write-off-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/home-based-start-ups-hit-out-at-vehicle-tax-write-off-startupsmart\/","title":{"rendered":"Home-based start-ups hit out at vehicle tax write-off – StartupSmart"},"content":{"rendered":"

Home-based business groups and tax experts have hit out at the Federal Government\u2019s plan to scrap the Entrepreneurs\u2019 Tax Offset and replace it with an across-the-board deduction of $5,000 for purchasing new cars, arguing start-ups will suffer as a result. <\/span> <\/p>\n

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The plan, announced by Treasurer Wayne Swan yesterday, was decided upon after the Future Tax System Review recommended the ETO be scrapped due to high compliance costs and poor targeting.<\/p>\n

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It is expected the cut will see the Government save $365 million over four years, while $350 million of that will be pumped into the new $5,000 vehicle deduction.<\/p>\n

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The new initiative will provide businesses with an instant write-off of the first $5,000 of any vehicle purchased from 2012-13.<\/p>\n

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It will combine with other initiatives announced during the Henry Tax Review, which include an immediate write-off of all assets valued at under $5,000, and a reduction in the company tax rate to 29%.<\/p>\n

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\u201cAFTS concluded that ETO provided a disincentive for businesses to grow because the benefit available started to decline at $50,000 of annual turnover and cut out completely at $75,000,\u201d Swan said.<\/p>\n

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\u201cThe ETO was also only available to individuals with incomes under $70,000 and its poor targeting and complexity meant 2.3 million small businesses missed out on any benefit.\u201d<\/p>\n

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The ETO provided small businesses, with turnover under $50,000, a tax offset equal to 25% of the income tax payable on business income. The benefit was phased out and stops once the business income hits $70,000.<\/p>\n

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Barbara Gabogrecan, president of Home Based Business Australia, has labeled the move as incongruous, arguing that it\u2019s like \u201ccomparing oranges with apples\u201d.<\/p>\n

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\u201cSure, if they want to give something towards purchasing a new car, so be it. But why take away a tax incentive for people to set up their own business?\u201d she says.<\/p>\n

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Gabogrecan says most home-based businesses have no need for a car, particularly if they operate their business online.<\/p>\n

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\u201cWhat the Government\u2019s really doing is helping the car industry, not helping the home-based businesspeople,\u201d she says.<\/p>\n

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Sue Prestney, principal of accounting firm MGI Melbourne, has also voiced her concern over the decision, saying the Government should think twice before taking away early-stage assistance.<\/p>\n

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\u201cI would think it isn\u2019t terribly targeted; it just sort of rewards people for having low turnover. While it\u2019s nice to give people a bit of a leg-up when they\u2019re starting out in business, I’m not sure this was the best way of doing that,\u201d Prestney says.<\/p>\n

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\u201cHaving said that, any assistance you get when you\u2019re starting up is worthwhile, and you would not like to lose this and not get compensated somehow.\u201d<\/p>\n

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Prestney says although there is only a small number of businesses using the offset, the Government should still replace it with start-up assistance.<\/p>\n","protected":false},"excerpt":{"rendered":"

Home-based business groups and tax experts have hit out at the Federal Government\u2019s plan to scrap the Entrepreneurs\u2019 Tax Offset<\/p>\n","protected":false},"author":2,"featured_media":62669,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/31989"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=31989"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/31989\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/62669"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=31989"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=31989"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=31989"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}