GS/3 resale value?

[Jonathon]

only if they are a GST registered business. businesses below 50k p.a. do not have to register or charge GST.

Yep, although the threshold is $75k.

[brettreaby]

What about input tax credits for someone who uses the machine to produce GST-able drinks? Can they claim the GST paid the purchase of the machine (or part thereof) in that respect?

only if they are a GST registered business. businesses below 50k p.a. do not have to register or charge GST.

[chokkidog]

Sorry Chokky, but I can't think of any deductions that require an ABN, GST or ASIC registration?

The deductibility of an expense comes down to whether it's incurred in the course of making money. So whether you're a global company or a hobby coffee roaster operating from your garage - if you're trying to make money then your direct expenses are deductible, either immediately or via depreciation.

ahhh......... should've left it at....... ' +1 for asking the accountant'

never mind ;-)

* tho' I wasn't actually talking about deductions but the ability to claim a refund on the GST input..
which only means I didn't read the question properly ;-D

[Barry O'Speedwagon]

Sorry to be pedantic, but reclaiming the GST is quite different to an income tax deduction.

Yeh, I know....I'm a non-practising practising accountant.

I was just trying to connect the requirement for registration with an ultimate tax benefit.

[Jonathon]

Sure, if you're GST registered and using the machine to generate income then you recover the 10% GST.

Sorry to be pedantic, but reclaiming the GST is quite different to an income tax deduction.

[Barry O'Speedwagon]

Sorry Chokky, but I can't think of any deductions that require an ABN, GST or ASIC registration?

The deductibility of an expense comes down to whether it's incurred in the course of making money. So whether you're a global company or a hobby coffee roaster operating from your garage - if you're trying to make money then your direct expenses are deductible, either immediately or via depreciation.

What about input tax credits for someone who uses the machine to produce GST-able drinks? Can they claim the GST paid the purchase of the machine (or part thereof) in that respect?

[Jonathon]

+1 for asking the accountant ........ but it will be determined by the proportion of your income generated through
the 'home ..;-)...um....office' and whether or not it's a registered business with ASIC, has an ABN and is registered for GST with the ATO.

One or two hoops, not many........ but ask the accountant.

Sorry Chokky, but I can't think of any deductions that require an ABN, GST or ASIC registration?

The deductibility of an expense comes down to whether it's incurred in the course of making money. So whether you're a global company or a hobby coffee roaster operating from your garage - if you're trying to make money then your direct expenses are deductible, either immediately or via depreciation.

[Jonathon]

Finally, a topic I can speak to with some knowledge, as an accountant.

If you have a room in your home you've dedicated as a home office, and you actually use it for work purposes, then you can claim a proportion of your home costs - rent/mortgage, utilities, etc. against your taxable income. The normal way is to base the deduction on the percentage of your house area that's dedicated to the home office.

You can also claim a much higher proportion of the costs of more relevant costs, such as your IT equipment, internet, etc, based on the proportion of work use.

However, assuming you don't work in the coffee or related industries, I think you'd struggle to justify a $5k coffee machine as a business expense. In fact I don't think you could even justify a $150 sunbeam, as it's not required to perform your work duties.

Incidentally, if you work for yourself and don't operate through a pty ltd, then be very careful about having a home office, you can easily lose some of your CGT exemption even if you don't actually claim a cent in deductions.

[chokkidog]

+1 for asking the accountant ........ but it will be determined by the proportion of your income generated through
the 'home ..;-)...um....office' and whether or not it's a registered business with ASIC, has an ABN and is registered for GST with the ATO.

One or two hoops, not many........ but ask the accountant.

[TC]

I guess I should be asking an accountant these questions.

Yes- one for your accountant.

[Hildy]

If you had a home office, can you partly expense your coffee machine to the home office portion?

I guess I should be asking an accountant these questions.

[chokkidog]

Hi Chris,

You're comment prompted me to look at the quote, ...... sure enough and my mistake.

I don't factor in GST on my coffee purchases, they are all business expenses.

That'd be $5200 + gst..... $5720. Ooops.

[TC]

Interesting Chokki. Best I ever saw them for was $5.9k. When we were last at 0.65 Euro to the AUD Peso, retail was $7.2k so I'd reckon we're headed in that direction on a GS/3.

In demand stuff holds value well. Same with grinders...

[chokkidog]

Yeah, I thought that originally. Looks like they have gone up in price, you could get one for $5200 last year.
CP has them for 6.5k. Not sure what the local Melbourne price is. If that is what you pay, then over three years they wouldn't lose much more than 1.5k.

It seems that with good coffee machines you can throw the 'little red book of resale value' out the window. It
would mostly be relative to current new price at time of sale, if any. :-D

[Jonathon]

Hi Jonathan,

Sadly pricing has increased since then and I suspect we will see more due to the depreciation against the Euro.

Rocket, VBM, LM, Expobar and a few others are yet to move much (or at all) and this is not sustainable. I'd be moving quicker rather than later on any of these brands as the only pathway for price is currently up. It's a good time for exports, but not for imports....

Thanks Chris, unfortunately I need to sell my car first...if you want to buy a BMW we might have a deal!