To help Australian industry make some headway through difficult times, the Federal Government has recently announced an Investment Allowance package. This will mean considerable cost savings for businesses right across the board in the form of significant tax incentives.
The allowance gives businesses a one-off tax deduction equal to 30% of the capital cost of eligible new equipment and motor vehicles costing $10,000 or more. This could mean general equipment, computers, company cars and more. What’s more, the new allowance is in addition to the standard depreciation claimed for such assets.
Mark O’Donoghue, principal of finance broker ‘Finlease’, is acutely aware of the pressures facing his clients who are typically small to medium sized businesses and believes these new stimulus measures will have a significant impact. “When you consider these measures have come at a time of falling interest rates, they are likely to have a profound effect on the bottom line of a number of businesses.”
Naturally individual companies need to do their own research to find out what benefits can be gained given their current situation. However, various scenarios prepared by Finlease for various clients revealed that the tax savings could add up to many thousands of dollars.
Full details of the investment allowance contained in the stimulus package can be found by visiting http://www.alp.org.au/media/0209/mspmsbistres030.php.
Right now, interest rates are at 40 year lows and still falling, while new equipment and motor vehicles are being sold at bargain prices. So this stimulus means that now is an opportune time to upgrade.
You must act by 30 June to benefit from this limited time opportunity. Equipment must be acquired or ordered between 13th December 2008 and 30th June 2009, and installed & ready for use by 30th June 2010. Additionally, for companies turning over $2million or less per annum, the allowance is available for assets costing $1,000 or more.
Given the urgency of finalising equipment or vehicle purchases in time, many business owners may find securing the funds to be somewhat challenging in this tight credit market. This is where enlisting the services of specialist brokers like Finlease can be invaluable. They can access a range of leading institutions to secure the funds you need in time. A broker can visit you on site or in your office, and will handle everything from your application to approval to settlement and actively manage the whole process.
This is general information and does not take into account your specific circumstances. You should seek confirmation from your accountant.