KeyPlay Business Solutions

Temporary Investment Allowance

Great News for Businesses!

In these times of significant financial stress and hardship brought on by the impending economic recession, we are pleased to see the Rudd government offering a helping hand for business in the form of a temporary additional tax deduction. This investment allowance works alongside the government's Economic Security Strategy to encourage investment among businesses and to further stimulate capital growth.

How does this affect you and your business?

Although the impending economic recession is making times tough on Australian business, the government is aiming to create an incentive for businesses to undertake capital investment to stimulate overall economic growth. Any ‘eligible' assets purchased will receive an additional tax deduction that will be equal to 50% of the cost of the asset. Like all business tax deductions, this is only effective on the portion of the asset used for business purposes.

What makes an asset ‘eligible'?

Assets eligible for the allowance are new tangible depreciating assets used in carrying on a business. Small businesses can claim an additional 50% tax deduction for eligible assets costing $1,000 or more that they acquire from 13 December 2008 to 31 December 2009, and install by 31 December 2010.

This deduction is on top of the usual capital allowance deduction claimable for the asset in the taxpayer's income tax return.

To benefit from this tax break a small business must have a turnover of $2 million a year or less.

Other businesses can receive the same deductions for eligible assets greater than $10,000.

Please contact this office to check your eligibility if you are considering purchasing a new business asset and wish to take advantage of the extra tax deduction available.