Small Business Owners and Tradies….You Need to Act NOW to Take Advantage of the $20,000.00 Immediate Tax Write Off This Financial Year!



The Clock is ticking…you need to act Now!!

If you’re running an ABN-registered business with a turnover of less than $2 million, you can take immediate advantage of an accelerated depreciation measure announced in last years Federal Government budget.

The new provision allows your business to immediately deduct the full cost of any physical items you purchase between 12 May 2015 and 30 June 2017 costing less than $20,000….such as computers, shop fixtures, cars, tools, etc.

It’s an amazing opportunity to buy vitally necessary assets for your business and Capital Funding is well placed to assist you with competitive rates and terms on any finance you might need to purchase these goods.

Correctly structuring your finance is extremely important as it can result in even further tax deductions and immediate cash flows!

With interest rates at record lows, and generous instant asset write offs at your disposal, now is the time to really give your small business that extra push it needs to be truly successful, but you will need to move quickly as lenders are always inundated with applications coming to-wards the end of the financial year and approval time frames are starting to stretch out.

It’s important to get your finance approved immediately to ensure that you’ll be able to settle any proposed purchase prior to the 30th June to take advantage of the write off this financial year.

How does it work?

If you were to purchase a vehicle with the correct finance contract for $20k and  settle the purchase prior to the 30/6/2017 then you would immediately obtain a $20k depreciation deduction in the 2017 financial year.

If we apply a 30% tax rate for this example, then this is effectively a $6,000.00 hand out from the ATO!

If we were to apply the normal depreciation rate for vehicles of 22.5%, then the benefit is effectively reduced to $1,350.00…which represents a difference of $4,650.00!!

You won’t be able to claim any further depreciation on the vehicle in the following years, but I’m sure you can live with that.

Now on top of this if you correctly finance the purchase you will be entitled to claim the GST back on the purchase in the June QTR.  If for the sake of the example the GST is $2k, that means an immediate cash injection to your business of $2k.

If you add the tax savings and the GST refund, this comes to $8,000.00!

This amount would effectively cover your repayments on the vehicle for the next 18 months.  Now, that’s a juicy incentive to help you expand your business or to make it a little more productive.

Time is of the essence!

As I mentioned previously, the clock is ticking and you have to move immediately.  We have an impending deadline and at this stage we’re not sure whether the government will extend this initiative or not.

Last year the respective equipment financiers got heavily backlogged coming into the end of June and many SME’s who were looking to take advantage of the offer missed out.  You also have to be mindful about your suppliers being able to deliver the products prior to the end of June.

If you would like to find out more or discuss your finance options please contact us immediately on 07)5554 5221.

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ShayneArticle by Shayne Fergus, Capital Funding Group

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