TEMPORARY INVESTMENT ALLOWANCE NOW UP TO 30%!
Feb 2009

It’s a great time to take advantage of the governments Temporary Investment Allowance with Get Packed and purchase those machines that in normal times seem expensive to the business, but in reality will now cost you 30% less. On the 3rd February, the Federal government has announced a 30% Temporary Investment Allowance to encourage businesses to invest in capital equipment as part of its $42 billion Nation Building and Jobs Plan.

This is an increase from the previous 10% announced in December. This allowance has been provided in the form of a one off tax deduction equal to 30% of the cost of most new tangible depreciating assets and new expenditure on existing assets used in carrying on a business (refer to government press release, Australian Tax Office and your accountant for particulars). For small businesses (with an annual turnover under $2million) you are able to claim 30% tax deduction (on top of standard depreciation claimed) for eligible assets costing $1000+ as long as it is acquired prior to 30th June 2009, and installed by 30 June 2010. Then from 1st July -31st Dec 2009, for eligible assets costing $1000+ they can claim a 10% deduction (on top of standard depreciation claimed) as long as it is installed by 31st Dec 2010.

For larger businesses (turnover over $2million) the dates and percentages are the same, but the minimum expenditure must be over $10,000.

Examples: On a $100,000 eligible asset this equates to an extra $30,000 as a “one off” tax deduction, as well as standard depreciation claimable.

A small business that buys and installs a $2000 computer before end of June 2009 can claim an additional $600 deduction in its 2008-09 tax return.

A company that purchases a shrink machine for $44,000 for use in business will get a “one off” tax deduction of $!3,200.

A company that purchases a Semi Automatic Strapping Machine for $1700 will get a “one off” tax deduction of $510.

Get Packed recommends that you obtain advice from your accountant prior to making purchases with the intent to make claims under the Temporary Investment Allowance.