Home – New Forums Money matters How the Governments Stimulus Package can assist your small business

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  • #964444
    McAdam Siemon
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    Hi Flying Soloists,

    Just thought this might be of use to a number of you out there as a number of my clients and I will be taking advantage of this once off tax deduction from the recent stimulus package.

    Investment allowance for small business

    Of interest to many business operators is the 30% investment allowance.

    Under this allowance, business operators will be able to claim a 30% tax deduction for eligible assets. To be eligible, small businesses only need to spend $1,000 to obtain the bonus deduction (other businesses must spend $10,000 or more). A small business is one with a turnover below $2 million. This new allowance seems to replace the investment allowance announced last year. The allowance provides:

    Date asset acquired: Between 13 December 2008 and 30 June 2009
    Installation date: Must be installed by 30 June 2010
    Rate of allowance: 30% of asset’s first and/or second elements of cost

    Date asset acquired:Between 1 July 2009 and 31 December 2009
    Installation date: Must be installed by 31 December 2010
    Rate of allowance:10% of asset’s first and/or second elements of cost

    In addition to the investment allowance, businesses would also claim the normal depreciation deductions over the effective life of the asset.

    The allowance will be claimed as an additional deduction in the tax return for the year in which the asset is installed.

    If cash flow permits (and for many it won’t) the investment allowance may have the effect of bringing forward investments that the business was already going to make. Just remember that there is a period of time between making the investment and receiving the allowance that you need to factor into any spending decisions.

    So if you have been thinking about purchasing a new car/busines equipment/IT this is a great time to do it.

    Happy deductions!!

    Sam

    #1005861
    KoB
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    Time to upgrade that computer/printer perhaps?

    Can you please jot my memory (from my Taxation 101 days at uni) of what the 1st element and 2nd element mean?

    #1005862
    Astrid
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    Thanks Sam,

    as I am in the process of updating hard/software this comes in handy.

    Cheers
    Astrid

    #1005863
    McAdam Siemon
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    KoB, post: 5200 wrote:
    Time to upgrade that computer/printer perhaps?

    Can you please jot my memory (from my Taxation 101 days at uni) of what the 1st element and 2nd element mean?

    Hi KoB,

    Generally the first element is going to be the cost of the asset and the second item will be any costs associated with getting that asset in place in working order.

    Thanks

    Sam

    #1005864
    Califord
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    Rudd under fire for linking bushfire relief to stimulus package … has already
    acted decisively to assist small business though a multi-billion package. … as
    a small business owner and sole trader, i feel the government has forgotten that
    … Find the answer › How can I promote my business on a minimum budget? …

    #1005865
    relentless
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    thanks for this Sam without your contribution I would have never known.

    Now time work out what I need :)

    #1005866
    KRW Finance
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    Hi

    The 30% tax break also applies to assets purchased via finance. So with no large cash outlay you can still get the benefit of the 30% tax deduction being offered as part of the stimulus package.

    Visit my website and download the FAQ from the government.

    Or give me a call if you need more information

    #1005867
    Japh
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    Does anyone have a link to the finer details on this one? An article on the ATO website or something more authoritative?

    Just want to confirm where I fit into it before making any purchases ;)

    Thanks!

    #1005868
    Astrid
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    Andrew has some links in his posting above:

    http://www.krw.com.au/?id=taxbreak

    #1005869
    Japh
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    Thanks for that! I generally skip links in footers, or links that make me search ;)

    Also, I was actually hoping for a government website link… I’m sure I’ll be able to find it now anyway.

    #1005870
    Avatar Bookkeeping
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    Thanks for this information, its been very helpful.

    Can you please tell me if this 30% will also apply to items that have been hired rathered than purchased. I know that for taxation purposes, hired equipment is classified as a purchase via loan so that depreciation can be claimed for. Will the same apply to this 30%?

    #1005871
    yuley95
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    Hi everyone,

    I’ve read all of the info I can (including the links in this thread) but can’t find a really succinct description of a small business that would qualify for this.

    I have an ABN and definitely turn over less than $2 million pa. I actually work full time as an employee and do a little film making on the side. I is in this capacity that I was considering buying some new assets.

    I only made about $3,000 in the past year from my small business. I don’t have any employees or anything like that.Does anyone know if I qualify? Or can you point me in the right direction?

    THanks very much for your help.

    Andrew

    #1005872
    KRW Finance
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    • Total posts: 13
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    Japh, post: 7732 wrote:
    Thanks for that! I generally skip links in footers, or links that make me search ;)

    Also, I was actually hoping for a government website link… I’m sure I’ll be able to find it now anyway.

    Hi Japh

    You will find info at http://www.treasurer.gov.au

    The FAQ on http://www.krw.com.au was obtained from the ATO website.

    We also recommend seeking advice from an accountant.

    good luck

    #1005873
    KRW Finance
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    • Total posts: 13
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    yuley95, post: 7737 wrote:
    Hi everyone,

    I’ve read all of the info I can (including the links in this thread) but can’t find a really succinct description of a small business that would qualify for this.

    I have an ABN and definitely turn over less than $2 million pa. I actually work full time as an employee and do a little film making on the side. I is in this capacity that I was considering buying some new assets.

    I only made about $3,000 in the past year from my small business. I don’t have any employees or anything like that.Does anyone know if I qualify? Or can you point me in the right direction?

    THanks very much for your help.

    Andrew

    Hi

    Any business that turns over less than $2M qualifies for the now 50% tax break – provided you are making a profit. Ie. the tax break cannot be used to increase losses

    I recommend that you speak with an accountant to clarify your position. Do you have an accountant? If not I can point you in the right direction.

    regards

    #1005874
    yuley95
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    • Total posts: 2
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    KRW Finance, post: 7739 wrote:
    Hi

    Any business that turns over less than $2M qualifies for the now 50% tax break – provided you are making a profit. Ie. the tax break cannot be used to increase losses

    I recommend that you speak with an accountant to clarify your position. Do you have an accountant? If not I can point you in the right direction.

    regards

    Thanks for your help. Much appreciated

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