fbpx

Trade Insurance

The federal budget released earlier this month has been touted as the budget for small business.

As a small business owner myself, it was great to hear Joe Hockey go on about the benefits of small business on the greater economy.

The budget has also been promoted as being a great thing for tradies.

Primarily this is thanks to the $20,000 instant tax deduction.

But what does this tax deduction actually mean, and how can it benefit you and your trade business?

$20k asset write off

Until now, only assets purchased for less than $1,000 could be claimed 100% straight away.

So if you bought an item for $900 you could claim the tax back on the full purchase price on your next tax return.

But if you bought an item for $1,100 you could only claim depredation on your next tax return. So basically you’d only be getting a tax deduction on part of that $1,100 upfront.

What this change means is that you can claim the full deduction now on assets worth all the way up to $20,000 rather than just $1,000.

Let’s say you went out and bought a ute for $20,000. On your next tax return you would be able to claim a tax deduction on the full amount.

With the small business tax rate reducing to 28.5% (previously 30%) that is the amount you’ll be able to claim back.

That’s $5,700 straight back into your pocket at tax time! Not bad at all.

Under the old rules you’d still be claiming the tax back, but it would be over a number of years via depreciation.

So should we be spending up?

The government (and many businesses) would love it if tradies got out there and started spending up big on new equipment and tools.

Tools

And when there is such attractive tax deductions available, why wouldn’t you?

Well a wise person once told me that you should never make a decision to do something based purely on the tax benefits.

Sure going out and spending $20,000 on a new piece of gear and getting a $5,700 deduction sounds great, but if you didn’t really need the gear, then it’s kind of $14,300 wasted…

So by all means take advantage of this deduction, but don’t waste money just to get some tax back, and make sure your cashflow can support the purchases.

And lastly, just to be clear, this change doesn’t necessarily put more money back in your pocket.

It simply puts the money there in the first year rather than spreading over a number of years via depreciation.

PS. If you’re looking for tax deductions, remember that public liability, tool insurance and income protection are all 100% tax deductible!

Advice warning

Trade Risk are not qualified to provide tax advice. This information in this article is general in nature and you should consult a qualified taxation professional (such as your accountant) before making any decisions.

Tradies Love Trade Risk

In 2017 Trade Risk was awarded a Gold Trusted Service Award for the amazing service we offer to thousands of tradies from around Australia.

  • testimonial background
    "Excellent customer service from the account manager..flexible to insurance requirements and quick to respond"
    Andrew James Tims | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Ive had insurance with this crowd in the past. I went to renew my membership in the past as I had let it lapse a couple of months. The price went up 30% so I didn't go with them. Then 3 months later I go back to there website and I get my insurance again for the same as original."
    | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "good service"
    Hansford Projects Pty Ltd | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Great service as always. Would recommend."
    | Trade Insurance - Renewal |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Good service"
    Build it up constructions | Tradesman Insurance | Ipswich
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "I needed urgent cover and Helen at Trade Risk was so helpful and had me covered at a really competitive rate. Details of the cover were explained so I am confident I have the cover I need. I would definitely recommend Trade Risk."
    Tim Billing | Tradesman Insurance | Brisbane
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "The best Insurance"
    Ondrej Balogh | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Good service"
    | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Good very easy to get a policy"
    Ricky P Jamieson | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Great service will recommend to others."
    Jason Edward Styles | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "The process of renewal of my Trade Risk seemed to be done efficiently and timely!"
    Cornerstone Tiling Pty Ltd ATF PS.23 Family Trust | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Reasonable prices efficient and friendly staff"
    Ian Spicer | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "There was a problem with the account details and just a quick phone call and as I was away at work no threats just please fix it when you get back they could have made a big deal out of nothing but didn't and I feel that is great customer service."
    Matthew John Mcgee | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Great service"
    | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "I contacted you regarding my policy ,no one got back to me then the policy expired and my customers started contacting me ,we lost work because we were not insured ,a lot of our work comes from ambulance Victoria , they stoped writing purchase orders to use because of it . then we asked for another quote for on hook insurance for our crane truck same thing again no follow up and no quote."
    Bayside Machinery Pty Ltd | Tradesman Insurance | Mallacoota Victoria
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Excellent customer service went above and beyond to help help out they made all the necessary phone calls and I didn't have to chase them . They did everything for me ."
    | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "it would be 5 stars if the renewal was timely and not requiring me to contact Trade Risk for a renewal quote."
    | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full
  • testimonial background
    "Easy to deal with"
    | Tradesman Insurance |
    star fullstar fullstar fullstar fullstar full