30% Investment Allowance

Posted on April 1, 2009

Take advantage of the investment allowance of 30%, record low interest rates and great deals from equipment vendors.

The federal government announced in early February a special 30% investment tax break to help stimulate investment in capital equipment.

 

While full details have not yet been confirmed, it is important for business to begin planning.

 

Businesses are encouraged to bring their capital expenditure plans forward to take advantage of this tax break.

 

Under the proposed tax break a business can claim an extra 30% tax deduction for new assets, or upgrades to existing assets for capital investment undertaken between December 13, 2008 and June 30, 2009 and install prior to 30 June 2010. For assets purchased between July 1, 2009 and December 31, 2009 a reduced incentive of 10% still applies.

 

It is important for businesses to begin organising their capital equipment needs early to avoid missing out on this important tax break.

 

Small business whose turnover is less than $2,000,000 pa can claim the deduction for all assets $1,000 or more.

 

Larger businesses can claim the allowance for assets $10,000 or greater.

 

Some Examples
A small business with turnover of $1,800,000 pa requires a new notebook for their field staff totalling $2,000. Under the proposed tax break they can claim an additional $600 in deduction for their 2008-09 tax return.


A larger business with turnover greater than $5,000,000 requires a new printing press valued at $100,000. Taking into account the proposed tax break on offer they can claim an additional $30,000 in deduction for their 2008-09 tax return.


Now is a good time to analyse your current capital equipment, identify deficiencies or opportunities and plan out what you need. Once you have decided on your needs, plan out when and how you will acquire the new equipment. How much income could this new equipment generate for you?

 

Take advantage of record low interest rates and keen vendors and act now!
Financing your new purchase will ensure you reap the benefits available through additional deductions and the added efficiencies of new equipment today. Whilst allowing you to spread the cost of the equipment over a number of years and future earnings.

 

Why not contact your Alliance Equipment Finance Relationship Manager now to organise your no obligation finance pre-approval. You can then organise the purchase and installation/delivery within the designated time frames to avoid missing out.

 

What equipment do we finance?
Remember, Alliance Equipment Finance can assist you with all your equipment finance needs. Below is just a few examples of the equipment we finance:

 

  • Telephone Systems
  • Computer Equipment
  • Mail Room Equipment
  • Facsimiles
  • Furniture
  • Photocopiers
  • Motor Vehicles
  • Materials Handling Equipment
  •  Printing Equipment
  • Manufacturing Equipment
  • Security Equipment
  • Office Fit Outs
  • Yellow Goods & Forklifts
  • Communications Equipment
  • Medical Equipment

 

Key dates to consider

  • 13 December 2008: Date from which new purchases can be claimed
    30 June 2009: Cut off for the purchase of equipment (enter into binding contract to acquire equipment)

 

  • 1 July 2009: Secondary cut-off (Reduced 10% allowance still applies) for 31 December 2009 contracts dated after 30 June but prior to 31 December 2009.

 

  • 30 June 2010: Equipment must be installed/in use (if required)

 

To find out more about the allowance visit the Federal Government Treasury website.
www.treasury.gov.au

 

Disclaimer:
It is important that before you consider acting on this information you speak to your accountant for specific financial advice.

 

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Posted by Admin at 3:14 pm 0 Comments