“You wouldn’t expect something coming from the government to be so simple, but it is. So we’ve broken down the Investment Allowance into plain English and here are the main points worth remembering.
In short, the Investment Allowance are a tax benefit additional to the depreciation you can already claim when you purchase eligible vehicles and equipment for your business.
Larger companies with a turnover of $2 million and over which have placed an order for vehicles and equipment by June 30 this year are eligible for the 30% Investment Allowance. Companies that missed that deadline can still make a purchase or order by 31 December 2009 and qualify for the 10% Investment Allowance.
For small companies with a turnover under $2 million, there’s a 50% Investment Allowance, which is an outstanding opportunity.
In each case, you have 12 months after those respective deadlines to take delivery of the vehicle or equipment and have it installed ready for use.
The vehicles or equipment you buy can be new or demonstrator items, including cars and commercial vehicles, factory equipment, computers farm machinery. Anything costing $1,000 and over for small companies, or $10,000 and over for larger companies. Major upgrades of existing equipment also qualify.
What’s also significant is that these incentives are coming while interest rates are at a 49 year low. Just remember to use the right finance product, your purchase must be funded by a Chattel Mortgage, not a Commercial Hire Purchase (CHP) or Lease.
These are the major points but you should also talk to your accountant or tax. And remember, you have to make your purchase or at least place your order by December 31st, 2009. At Finlease we’ve even simplified the finance application and approval process as well, to help you finalise your purchase in order to make the deadline.
I think the Investment Allowances are the best thing to have happened to business for over 20 years, so I’m urging all our clients to take advantage of this once in a lifetime opportunity.”
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