On April 3, 2107 a blog article titled HOW TO TAKE ADVANTAGE OF THE SMALL BUSINESS ASSET DEDUCTION OPPORTUNITY addressed a tax concession that will end on June 30, 2018.
Time still remains for businesses generating less than $2,000,000 revenue per annum to exercise the right to an immediate tax right off for the purchase up to the value of $20,000 for what is categorised as small-plant equipment.
If your business or practice is considering a purchase to replace or upgrade an existing piece of medical equipment or wanting to add a device previously not owned, there is still scope to do so and claim the deduction before it disappears.
We spoke with Mr Jason Skinner, Partner and Director of Skinner Hamilton. He heads up a CPA firm operating from the Gold Coast, Queensland that specialises in tailored solutions for medical professionals. Mr Skinner emphasised that the available deduction was 'sizable' as it applied not to the total purchase value, but the value of each piece of equipment. That would mean a deduction up to the value of $20,000 per unit or device purchased was possible.
Another important point he raised was that if a business or practice was GST registered the $20,000 value was actually exclusive of the GST.
If you did not catch the first of our two e-mails on this matter, it can be read here; HOW TO TAKE ADVANTAGE OF THE SMALL BUSINESS ASSET DEDUCTION OPPORTUNITY
If you are interested in exploring the latest and highest quality medical devices for your practice visit Australia fastest growing online medical products supplier – AMA Medical Products to grab a well-priced solution.
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AMA Medical Products
Frequently Asked Questions
1. What is the small business asset deduction for medical practices?
The small business asset deduction (also known as instant asset write-off) is a tax concession that allows businesses generating less than $2,000,000 revenue per annum to claim an immediate tax write-off for small-plant equipment purchases up to the value of $20,000 per unit. This deduction applies to medical equipment and devices purchased by eligible medical practices and healthcare businesses.
2. When does the $20,000 instant asset write-off end?
According to the article published in 2017, the small business asset deduction was set to end on June 30, 2018. However, it's important to check with the Australian Taxation Office (ATO) or consult with a qualified accountant for current instant asset write-off thresholds and deadlines, as these tax concessions are often extended or modified by the government.
3. How is the $20,000 deduction calculated per purchase?
The $20,000 deduction applies to the value of each individual piece of equipment purchased, not the total purchase value. This means if a medical practice buys multiple devices or units, they can claim a deduction up to $20,000 for each separate piece of equipment, providing significant tax benefits for practices upgrading or expanding their medical equipment inventory.
4. Does the $20,000 limit include GST for registered businesses?
No, for GST-registered businesses, the $20,000 threshold is exclusive of GST. This means GST-registered medical practices can purchase equipment valued at $20,000 plus GST and still qualify for the full instant asset write-off deduction. This effectively increases the total purchase value that can be immediately deducted for tax-registered businesses.
5. Who is eligible for the small business asset deduction in healthcare?
Medical practices and healthcare businesses generating less than $2,000,000 in revenue per annum are eligible for the small business asset deduction. This includes general practices, specialist clinics, allied health services, and other small healthcare businesses that meet the revenue threshold requirements set by the Australian Taxation Office.
6. What types of medical equipment qualify for instant asset write-off?
Medical equipment categorised as small-plant equipment typically qualifies for the instant asset write-off. This can include diagnostic devices, examination equipment, therapeutic instruments, and other medical technology used in healthcare delivery. It's advisable to consult with a qualified accountant or tax professional to confirm whether specific medical equipment purchases qualify for the deduction.
7. Can I claim the deduction for replacing existing medical equipment?
Yes, the small business asset deduction can be claimed whether you're replacing or upgrading existing medical equipment, or purchasing new devices that your practice previously didn't own. This flexibility allows medical practices to modernise their equipment, enhance patient care capabilities, and maintain up-to-date technology whilst benefiting from significant tax deductions.
8. Should I consult an accountant about the small business asset deduction?
Yes, it's highly recommended to consult with a qualified accountant or CPA who specialises in medical professionals before making significant equipment purchases. Tax professionals can provide tailored advice on eligibility, timing of purchases, documentation requirements, and how to maximise your deduction benefits whilst ensuring compliance with current Australian Taxation Office regulations.
9. What is the most common medical equipment for a new practice?
Starting a new medical practice requires the right equipment and furniture to ensure smooth operations and patient care. Below are some of the essential medical items typically required:
Medical Equipment:
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Stethoscopes: Used for listening to heartbeats, lung sounds, and other bodily functions.
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Ophthalmoscopes: Essential for examining the eyes and diagnosing conditions like cataracts or glaucoma.
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Otoscopes: Used to look inside the ear and diagnose conditions such as infections or earwax buildup.
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Diagnostic Sets: Includes tools for examining eyes, ears, throat, and other areas of the body.
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Defibrillators: Life-saving devices used to restore a normal heart rhythm during emergencies.
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Thermometers: Vital for measuring patient body temperature to check for fever or other health concerns.
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Automatic Blood Pressure Monitors: Provides quick and accurate blood pressure readings without the need for manual cuff inflation.
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Pulse Oximeters: Measures oxygen saturation levels in the blood, an important tool for respiratory health.
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Scales: For accurately weighing patients as part of routine check-ups.
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Sphygmomanometers: Used for manual blood pressure measurement.
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Spirometers: Essential for assessing lung function, particularly in patients with asthma or other respiratory conditions.
Medical Furniture:
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Couches, Beds, and Tables: Comfortable and functional furniture for patient examination and treatment.
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Lighting: Proper lighting is essential for accurate diagnoses and a comfortable environment for patients.
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Trolleys and Carts: For storing and transporting medical supplies, medications, and equipment efficiently.
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Vaccine Fridges: Designed to store vaccines at the appropriate temperatures to maintain their effectiveness.
Having the right mix of medical equipment and furniture ensures a safe, efficient, and professional environment for your new practice.
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Disclaimer AMA Medical Products has made every attempt to ensure the accuracy and reliability of the information provided. The material found within this blog article made available by AMA Medical Products is for educational purposes only and to give general information and understanding of the topic. The content should not be used as competent or substitute accounting, taxation or business advice that would be acquired from a licensed professional service provider.