“It provides businesses with an incentive to gear up with new vehicles and equipment to grow and develop their business, while providing a strong tax benefit via writing off the total amount of the purchase in the current year… Conditions apply!”
AUTHOR: Ashley Evans
A formidable lever that emerged from the Federal Budget was the changes to the Instant Asset Write Off Scheme which are designed to help pull local businesses out of the recession and reignite the economy.
It effectively means businesses can purchase new plant, equipment or fleet vehicles under $5M and be able to claim it back against their tax rate.
The initiative is important because it provides businesses with an incentive to get back to operations as quickly and financially as possible.
It also means that for those businesses that are seeing a reasonable profit this financial year and choose to increase their equipment or fleet, it can assist them to add depreciation thereby also providing a financial incentive to buy now. This will have the flow on effect to stimulate the vehicle and equipment sector of all industries.
While at face value the Instant Asset Write Off Scheme is a home run and has plenty of merit to it, the last thing financial professionals want to see is misinformed small businesses losing out because the facts weren’t initially clear.
This is why we do encourage anybody considering taking advantage of the Scheme to speak to their trusted advisor and ensure that the finer details are worked through and there are no hidden surprises, especially for those Mum and Dad businesses.
ABOUT THE AUTHOR: Ash is an experienced lending manager, and agricultural specialist. Originally from Adelaide, he has had the pleasure of working with regional industries across Australia. Specifically, after taking an interest in North and Western Queensland, Ash co-founded the AAA Group and has played a fundamental role in the success of small business in the region. Throughout his 30-year career, Ash continues to cherish his wealth of professional relationships. Naturally, this has fueled his desire to connect remote business owners with the professional assistance they deserve.