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Welcome to the Business Insights Newsletter

What the Proposed Business Tax Allowance means to retailers

April 21st, 2009

Category: Retail Business Tips

Stimulus Bill coming to your Business?

Stimulus Bill coming to your Business?

What the Proposed Tax Allowance means to retailers
Today’s Post is quite a bit different from our normal posts in that we normally discuss Retail Business Tips or how to use Retail Management Systems to make your business run better. But today we are going to discuss the Federal Governments proposed Investment Allowance. This $2.7 billion Business Tax Break is a part of the Government’s $42 billion Nation Building and Jobs Plan.

What is the Investment Allowance?
This draft Investment Allowance legislation states that if you purchase any eligible asset before 30 June 2009 and install it by 30 June 2010, you will be entitled to a bonus tax deduction of 30% of the cost of the asset. If the purchase is made after 30 June 2009, the tax deduction will drop to 10%. These bonus tax deductions are in addition to the normal deductions applying to these types of purchases. (For more details please visit Australian Government Treasury site or consult you tax advisor).
What does the proposed Tax Break mean for your business?
The proposed Investment Allowance is a great opportunity, particularly if you have been considering updating your computer systems in the next 12 to 18 months. The proposed Investment Allowance can provide a smart way to maximise and extend your IT budget.

Example.

POS Business Investment Allowance

POS Business Investment Allowance

You purchase a new retail business system before 30 June 2009 and install it before 30 June 2010. The new system includes $20,000 worth of qualifying assets. You are entitled to a BONUS tax deduction of $6,000, in addition to the normal deductions for this type of purchase.

Even if you lease the new system, it is proposed that the lease company will claim the benefit of the Investment Allowance and pass on the savings as reduced lease rates.

Actions to consider Taking.
If you have been considering updating or replacing part or all of you retail business system, it would be VERY advantageous to make a commitment before June 30 2009, for installation before June 30 2010.

How can Creative Computing help?
We are familiar with the proposed legislation.  If you wish to take advantage of this opportunity, we suggest you contact Shaun on 1300 646 536,  to discuss your particular requirements, or email us.

We are expecting to receive a large number of enquiries about this in the next few weeks so we advise you contact us soon so you don’t miss out on this great opportunity.

Read about it! Creative Computing has written a more thorough report that has some added examples of businesses and their management hardware purchases. You can view the full Business Tax Allowance here

Disclaimer: Creative Computing provides Retail Management Solutions including Point of Sale, Inventory Management, Profitability, and Customer Relationship Management to small, medium and large businesses.  However, we do not provide taxation or accounting advice, so for financial issues, we recommend you seek advice from your tax accountant or finance department.