Did you know you can claim your solar panel system on tax? If you’re a small business or sole trader, with a turnover of less than $10 million per year, you’re able to instantly write off business-related purchases with a value of $20,000 or less.
Solar power can easily be categorised as a business-related expense. It’s the equipment necessary to efficiently and cost-effectively generate power to operate your business, from lighting to power points. Most systems for small businesses and sole traders will come in under this $20,000 limit.
To be eligible, you must be registered as a small business or sole trader. In Australia, that means having an Australian Business Number (ABN). That means anyone from freelancers to digital nomads are eligible, as long as your have that all-important ABN.
Of course, tax write-offs should be seen as s bonus, not an excuse for a spending free for all. $20,000 is a significant investment, although the potential for return and lifetime value is immense. This tax benefit is merely an added incentive for you to invest in a business expense that has long been on your radar.
As well as the instant tax write-off, you’ll see long term results from your smart decision to install solar for your business. Each quarter, you’ll be pleasantly surprised with your affordable power bill, and it will only take couple of years in most cases for the entire system to pay for itself in terms of money saved on electricity bills.
If your business is operated from your home, then determining the business portion of your purchase may be a little trickier. Nonetheless, it is certainly worth doing to save yourself at the next end of financial year. For the most reliable advice based on your individual situation, you should schedule some time to chat to your accountant about how to best work through this.
Businesses are in a prime position to get the most out of solar energy. Because most workplaces work from 9–5, your system will be producing power during the heat of the day. It will provide you with all the power you need, meaning you rarely if ever need to rely on drawing electricity from the main grid during those peak daytime hours (which mean peak daytime rates).
This tax incentive scheme isn’t guaranteed to carry into 2019, so the smartest move is for businesses to invest prior to 30 June, 2018.