BUY NOW AND SAVE A FURTHER 50% BEFORE 31 DECEMBER 2009

If you are considering buying an asset to use in your business, this is a good time to consider it.

A bonus deduction of 50% will be available to small businesses that acquire an eligible asset between 13 December 2008 and 31 December 2009 and install it ready for use by 31 December 2010. The previously announced 30% and 10% bonuses will continue to apply to all other businesses.

As part of the Nation Building and Jobs Plan to help Australian businesses through these difficult times, the Government has announced a temporary tax break in the form of an investment allowance as follows:
  • an additional tax deduction of 30 per cent of the cost of eligible new depreciating assets acquired under a contract, or started to be constructed, after 12.01am AEDT 13 December 2008 and before the end of June 2009 and installed ready for use by the end of June 2010.
  • an additional tax deduction of 10 per cent of the cost of eligible new depreciating assets acquired under a contract, or started to be constructed, between 1 July 2009 and 31 December 2009 and installed ready for use by the end of December 2010. New expenditure on existing assets may also qualify. 
For both periods, small businesses will be able to claim the deduction for eligible assets costing $1,000 (excluding GST as an input tax credit) or more. Small businesses must have a turnover of less than $2 million a year to qualify.

For other businesses, a minimum expenditure threshold of $10,000 (excluding GST as an input tax credit) applies.

The legislation to implement the Tax Break has not yet been introduced into Parliament at the date of this information update.

The key elements in this package are:
  • An extra 30% immediate tax deduction on top of the 100% depreciation deduction which means effectively 130% claim.
  • There will be no adjustment on this extra 30% for non business use as long as the asset was to be used in Australia and for the principal purpose of carrying on a business.
  • The extra 30% tax deduction will not be limited to assessable income and can be counted towards carry forward tax losses Following is the link to the ATO website http://ato.gov.au/