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The Government is providing businesses with a once off tax deduction off the capital cost of eligible assets, such as motor vehicles. Small businesses who have a turnover of under $2 million p.a. can claim a 50% deduction and general business can claim a 10% deduction on eligible assets purchased prior to 31st December 2009.
In order to comply with the proposal, assets must be:
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Used in carrying on the business
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Commit to investing in the asset between 13 December 2008 and 31 December 2010
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In operation by June 30 2010
The allowance can be claimed when the asset is first ready for use (i.e. delivered – in the case of a motor vehicle)
A lower investment allowance of 10% applies where the asset is purchased between 1st July 2009 and 31 December 2009 (and delivered prior to 31 December 2010). Eligible small businesses are able to claim the full 50% on assets purchased prior to December 31, 2009.
Key points:
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The asset must cost at least $10,000 or $1,000 for small businesses with a turnover of under $2 million
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The asset must be new (Demo and used vehicles are excluded from the proposed rebate)
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The allowance can only be claimed up to the luxury car limit $57,180 for the year ended 30 June 2009 (therefore maximum deduction is $17,154)
This information is not to be considered tax advice and you should seek independent advice to determine eligibility
Enquire today!
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