The federal government announced in early February a special 30% investment tax break to help stimulate investment in capital equipment. 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% 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 per annum can claim the deduction for all assets of $1,000 or more. Larger businesses can claim the allowance for assets $10,000 or greater.
For example, a small business with turnover of $1,800,000 per annum 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.
Financing the new purchase will ensure customers reap the benefits available through additional deductions and the added efficiencies of new equipment today. Whilst allowing customers to spread the cost of the equipment over a number of years and future earnings. Alliance Equipment Finance can assist customers with all the equipment finance needs.
Some examples of the equipment Alliance Equipment Finance includes:
- Telephone systems
- Computer equipment
- Mail room equipment
- Facsimiles
- Furniture
- Photocopiers
- Motor vehicles
- Materials handling equipment
- Printing equipment
- Security equipment
- Office fit outs
- Yellow goods and forklifts
- Communications equipment
- Medical equipment
Following are few dates to be considered:
- 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)