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Small Business 50% tax break on a road bike

Discussion in 'Politics, Laws, Government & Insurance' started by mmamster, Nov 7, 2009.

  1. I run a small business and am thinking of buying a new bike which will be used for work (commute plus travel during the day).

    The ATO's detailed press release for the tax break for small business on capital equipment only talks about cars being claimed but I see on the suzuki website the suggestion it can be claimed for quad bikes and dirties for farm use.

    Has anyone claimed it on a road bike as I know a lot of people are claiming it for private cars with mexed business use.



    PS I have searched the threads but found no clear answer.](*,)
  2. Very good question, I was thinking about this the other day...
  3. Ask your accountant.

    Post the answer here, then we'll all know.
    I've wondered about that too.
  4. bike courier: yes

    everyone else, no.
  5. does it make me a bike courier if you pay me $5 to deliver one letter for you once a year??
  6. The advice I have had is that you can, same rules as for a car.

    It makes sense when you look at the conditions for the tax break which just refer to capital acquisitions.
  7. i want a tax deduction on AGATT because i wear it to work and back.

    sorry Mark, i don't know...i'd think you could lease it as a company vehicle and claim the lease payments...i'm sure it could be done with the help of the right accountant.
  8. What is Agatt?

    I think you have misunderstood, it is not a leasing issue. You can lease a motorbike and pay the lease costs out of pre tax income to get the FBT benefit as an employee of a company.

    But I am talking about the 50% tax break claimable by a small business with an ABN and turnover under $2m that was in the May budget. It applies to capital investment up to 31/12/2009 incuding vehicles.

    Say you buy a bike for $20K.

    You can claim as a deduction in the year of purchase, 50% of the cost - $10K. You can then claim the running costs and depreciate the vehicle over time. In effect you get 150% deduction of the price over time.


    This link is in application of the tax break to farm bikes (quads and dirties) bu t the point is there is no reason why a road bike can't qualify if it is used for business purposes.
  9. I'm sure if it were Compulsory Work Uniform, by way of Company Policy, you'd be able to claim it.... 8-[
  10. You can only claim a deduction on the portion used for business purposes - ie one delivery a year means the cost of doing the paperwork is higher than the tax rebate and thus pointless. The only people for whom it makes sense are those who can claim the full swag, thus the farm market advertising.

    For the same reason, the only roadie that makes sense is for a courier. And if your tax return says you are an office worker and you claim huge amounts for a bike, you can bet that an audit isn't too far away.

    As for claiming the cost of your gear to get from work and back - you can't claim those for the same reason that i can't claim the cost of a train ticket to work and back.

    Read the tax office site or see an accountant. If you have on-travel or different start work places each day then you can claim the on-travel or total depending on circumstances. Otherwise, nada.

  11. I don't agree with your comment re couriers.

    Correct you can't claim a direct commute but you can claim all other work travel. If you do need to travel for work it is well worth looking at. There is nothing to stop you using a bike instead of a car.

    And given kms on a bike are low for most people (I average about 3000 kms a year) it is not too hard to hit 50% business usage if you do a long trip for bus purposes on your roadie. Eg a ride to albury or warrnambool and back, or an interstate trip.

    Also think laterally - ride your bike to a work conference out of town instead of driving. when you go for a blast to the Alps try to meet a client up there.
  12. and if you don't use the vehicle much for business purposes (your 50%) example, you may be liable for fringe benefits tax on the rest.

    The problem used to get worse the less overall kilometres you cover given the options for statutory fractions for private usage - but the currrent gummint changed the rules on that anyway. In the previous scheme, unless you were covering at least 15,000km a year, the ato didn't regard it as legitimate business usage and taxed you accordingly if the vehicle had any private use. You'll want to check on recent changes.

    Go see an accountant.

  13. I have (read above).

    FBT is not an issue for a small business - I am not an employee.