30percent.com.au

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.

Are you an Australian Manufacturer trying to understand the impact of the Federal Government’s 30% Investment Allowance?

According to the organisers of National Manufacturing Week (which is actually next week – 12-15 May - in Melbourne!)…

… businesses such as manufacturers, fabricators, workshops, warehouses and many others will be able to claim a bonus deduction of 30% for eligible assets – including manufacturing, processing, electronic, IT and other capital equipment…

As published in Manufacturers’ Monthly, the organisers of NMW also illustrate a great example of what the allowance actually means for manufacturers

… under the 30% business tax break, a piece of fabricating equipment costing $100,000 will be eligible to claim a deduction of 30% of that $100,000 – or $30,000.  At the standard company tax rate of 30%, that would equate to a reduction in tax for the 2008-09 financial year of $9000

The thing to remember is that if you are a manufacturer who is interested in taking advantage of the tax break – you need to make your investment in eligible assets prior to 30 June 2009, and have the equipment installed and ready to go by 30 June 2010.  The financial year you can claim the deduction in may vary depending on your investment – so make sure our article on when you can claim your tax break.

If you have any questions – best bet is to take this information and talk to your accounting team.

Over at POS Solutions Australia, there have been a number of posts on the impact of the Federal Government’s Thirty Percent tax break on small business retailers.

They use a great example which drives home exactly what the tax break could mean to your small business…

… say a small newsagent purchased today $1,200 worth of computer equipment.

… they can claim $400 on top of the $1,200 they can already claim

You can read more about their take on the 30% tax break on their blog.  And from this post, it looks like business is very strong, thanks to the investment allowance.

Desktop and Laptop computer manufacturer and retailer Dell have put together a great article on what the investment allowance means to small businesses looking to purchase a desktop, laptop or server before 30 June.

As Dell mention in the article…

This great new initiative means a small business owner who buys a $2,000 personal computer during this time will be able to claim an additional $600 tax deduction for the computer in the 2008/2009 tax year.  It’s important to remember this allowance will be in addition to the normal capital allowance deduction the business owner would make for the computer.

…

All these new incentives mean it’s a great time to consider replacing old and outdated technology and equipment in your business.

You can find the “Great New Tax Breaks for Small Business: Take The Opportunity To Upgrade Your System Now!” article on Dell’s Business Ownership site.