30percent.com.au

On the 14th of May, the Tax Laws Amendment (Small Business and General Business Tax Break) Bill was passed by the Senate.

Whilst this does not make it law just yet – we still need to have the Royal Assent – it basically means that what is in the legislation will not change between now and when it does become law. 

You can read the legislation as passed by both houses of the Australian parliament on the Parlinfo website.

What does this mean?

If you are a general business with annual revenue greater than $2 Million – you have until 30 June 2009 to take advantage of the 30 percent investment tax break.

If your are a small business with annual revenue less than $2 Million – you have until 31 December 2009 to take advantage of the 50 percent investment tax break.

We are now set up and ready to go over at 50percent.com.au – which will focus specifically on the 50% Investment Tax Break for Small Businesses.

So if you have annual revenue less than $2 Million – and are looking to purchase eligible assets over $1000 before the end of this year… make sure you check it out.

For those of you following the Federal Budget tonight… especially those of you who have annual revenue below $2 Million… there is some great news.

The Treasurer put it nicely in his budget speech tonight:

Mr Speaker, small businesses are the backbone of the Australian economy, employing around half of all private sector workers.

That is why the Government will also provide immediate additional assistance by increasing the Small Business and General Business Tax Break to 50 percent for eligible assets ordered between December 2008 and December 2009, in addition to assistance for small businesses to take advantage of e-business opportunities.

We are currently digging deeper through the budget papers to find any more detail about the change (and if it just applies to Small Business, or as you could interpret from the speech – all businesses).  Keep reading, or subscribe to the newsletter below for regular updates.

UPDATE:  More detail found in Budget Paper No. 1

Looks like the change is just for small businesses, and NOT General Businesses who will continue to be able to take advantage of a 30% investment tax break.

As mentioned in Budget Paper No. 1:

The bonus tax deduction under the Small Business and General Business Tax Break will be increased to 50 per cent for small businesses.  This will further help them to invest, bolster economic activity and support  Australian jobs.  The tax deduction is available for eligible assets costing $1000 or more acquired between 13 December 2008 and 31 December 2009 and installed and ready for use before 31 December 2010.  The expansion will have an estimated cost to revenue of $141 million.

UPDATE:  More detail found in Budget Paper No. 2

The wild goose chase continues for detail on the announcement tonight

In Budget Paper No. 2, there is more information on changes to the Small Business and General Business Tax Break.

The Government will expand the Small Business and General Business Tax Break announced in the February 2009 Updated Economic and Fiscal Outlook to provide additional assistance to small businesses.  A bonus deduction of 50 per cent 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 percent and 10 percent bonuses will continue to apply to all other businesses.  This expansion will have an estimated cost to  revenue of $141 million over the forward estimates period.

Also in the same section of Budget Paper No. 2, the Government outlines some of the enhancements the are going to make to the original Small Business and General Business Tax Break…

The Government has also enhanced the Tax Break for all businesses since it was announced on 3 February 2009.  A taxpayer can now aggregate their investment in assets that are substantially identical, or that form a set, to meet the threshold.  Where assets are jointly held, a taxpayer can recognise all other business interests in the asset for the purpose of meeting the threshold, but will only be able to claim the Tax Break on their interest in the asset.  Where a taxpayer has met the investment threshold for an asset, they can claim additional investment in the assets as part of the Tax Break.  These enhancements have an unquantifiable but small revenue impact.

You can read more about this, and other budget items that might impact your life (like the extension of the first home owners grant) on the budget.gov.au site.

We are also bootstrapping 50percent.com.au to focus on this increased tax break – it will be live in the next few hours.

If you have been following the Australian Federal Government’s proposed 30% investment tax break… you will be more than aware of the fact that is it still just that… proposed!

And after what we saw happen with the “Alcopops” tax earlier this year, why would any serious business take advantage of a tax break that may not eventuate?

On the Sydney Morning Herald’s “My Small Business” site, Max Newnham posted an article which captures that exact sentiment, and dives a little deeper.

Here are a few of the key quotes from the article – first from the dealer principal of Yarra Valley Motor Group:

… 30 percent of our business customers are delaying the purchase of new commercial vehicles due to the uncertainty surrounding the investment allowance.

If that didn’t drive it home strong enough, this quote from the CEO of Network Help certainly will:

“Eight out of 10 companies we have submitted proposals to (are) delaying the upgrading of computer systems due to the uncertainty of whether the investment allowance will pass”

So what can we do about it?

Not much really until our friends in Canberra get back to work next week and start moving the bill through the house and across to the senate.  Being budget night on May 12, you would think that the Government would take advantage of that timing and accelerate the bill through parliament.. but who knows!

Best bet?  Keep checking back at 30percent.com.au for the latest news on the passage of the bill.

On 19 March 2009, the Federal Government introduced the Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 into the House of Representatives.

The Treasurer – Wayne Swan – commenced the second reading of the bill.  As recorded in Hansard…

I move:  That this bill be now read a second time.  This bill introduces the small business and general business tax break – a key part of the government’s Nation Building and Jobs Plan. 

The $3.8 billion tax break will help boost business investment, bolster economic activity and support Australian jobs.

The tax break is targeted towards encouraging and sustaining business investment in the face of a global recession

You can read Mr Swan’s entire speech from the second reading of the bill at the ParlInfo site.

Hi there, and welcome to 30percent.com.au

As many Australian business owners would know, on the 3rd of February 2009, the Prime Minister of Australia - Kevin Rudd, announced a raft of measures to stimulate Australia’s economy. 

One of the measures that made up the stimulus package that Kevin Rudd announced on behalf of the federal government was the Small Business and General Business Tax break.

To quote the Prime Minister’s media release…

To support jobs and Australian businesses – especially small businesses – the Government will fund an investment tax break for all Australian businesses.  This temporary business tax break will help Australian businesses boost business investment, bolster economic activity and support Australian jobs.

This website – 30percent.com.au – is dedicated to covering news, resources and promotions focused on the 30% Investment Tax Break.

Want to keep up to date on the 30% Investment Tax Break?

Make sure you subscribe to our email updates – each week between now and the 30th of June (when the 30 Percent Tax Break expires) we will send regular updates to ensure you have the right information to make the right decisions – and make the most out of this $2.7 billion tax break the Government is giving Australian businesses.