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Small business to benefit from Government Investment Allowance



Small businesses are being urged to take advantage of the Government’s 30 percent Investment Allowance before the June 30 2009 deadline.

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By Jessica Stanic

Small businesses are being urged to take advantage of the Government’s 30 percent Investment Allowance before the June 30 2009 deadline.

The Investment Allowance gives businesses a one-off tax deduction equal to 30 percent of the capital cost of eligible new equipment and motor vehicles costing $10,000 or more.

The tax break, in the form of an investment allowance will provide:

  • An additional tax deduction of 30 percent of the cost of eligible new depreciating assets acquired under a contract, or started to be constructed after 13 December 2008 and before the end of June 2009 and installed ready for use by the end of June 2010; or
  • An additional tax dedication of 10 percent of the cost of eligible new depreciating assets acquired under a contract, or started to be constructed between 1 July 2009 and 3 December 2009 and installed and ready for use by the end of December 2010.

National Australia Bank (NAB) are encouraging small businesses to take advantage of this allowance, believing it will be of a substantial benefit to them.

“The Government’s investment allowance offers businesses a great incentive to purchase new assets effectively at a discount. We encourage businesses planning on purchasing new assets this year to get financial advice to ensure that they take advantage of the allowances available to them”, said David Taylor, Head of Asset Finance at NAB.

According to Taylor, the investment allowances will give businesses the confidence to plan and invest for the future.

“By boosting business confidence and encouraging business investment, this measure will provide an important short term stimulus to the Australian economy in the face of the global financial crisis.”

Mark O’Donoghue, principal of finance broker Finlease, agrees.

“When you consider these measures have come at a time of falling interest rates, they are likely to have a profound effect on the bottom line of a number of businesses.”

For more information on this initiative, please see ‘Temporary Investment Allowance a boost for business.

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