What's New

New tax breaks for Small Business

The government has announced changes to the depreciation provisions for small business entities which apply from 1st July 2012.

These changes are significant and should be taken into consideration when making decisions on the timing of the purchase of depreciable plant and equipment for your business.

Motor Vehicles

Small businesses will be able to claim an immediate deduction for the first $5,000 of the cost of the vehicle in the year in which it is purchased. The remainder of the cost of the vehicle is then allocated to the small business depreciation pool and depreciated at 15% in the first year and 30% in subsequent years. The effect of this change is illustrated below, using the example of a $30,000 vehicle:

                                      To 30/6/2012          After 30/6/2012

Immediate deduction                 $ nil                   $5,000

First year of pool

depreciation at 15%                   $4,500               $3,750

Total tax deduction

in the first year                         $4,500                $8,750

Assets costing less than $6,500

An immediate deduction is allowed for any business asset purchased after 1st July 2012, for less than $6,500.

Currently, small businesses can only claim an immediate deduction for items of plant and equipment purchased costing less than $1,000. This represents a significant increase, which helps to align the cash outflow of the expenditure with the tax deduction.

As an example, consider a $6,000 item of equipment, if purchased on or before the 30th June 2012 the tax deduction in the year of purchase would only be 15% of the cost (i.e. $900). If the item was purchased on the 1st July 2012 the tax deduction in the year of purchase will be $6,000.

These changes may have significant cash flow effects on your business, it is certainly beneficial to take this into account with your tax planning for the 2011/12 financial year.

For further information, please contact Damien Allott, Senior Accountant d.allott@patrickrowan.com.au

Workshop 

"5 Effective Ways to Manage Your Business"

Struggling to stay on top of your cash flow?

We show you how monitoring your cash flow can make a difference to your bottom line and help you make smarter and better business decisions.

What's your TRUE financial position?

Let's go over what your Financial Statements are really telling you.

RECOMMENDED FOR: Business Owners, Managers and Bookkeepers of any retail or service business or organisation.

You're caught up in the day to day running of your business.

Let's look at the big picture and spend some time 'working on' rather than 'working in' the business.

Our presenter, Adrian McCartney, Partner at Patrick Rowan & Associates, has extensive experience in adding value to your business and helping you build and protect your financial position.

Wednesday 22nd February 2012 - 5.30 - 7.30pm

Central Geelong Location to be confirmed closer to the date.

This session is held at no cost and is part of the Central Geelong Marketing Seminar Series.

Please register your interest with Belinda Lyle, Client Relationship Manager at b.lyle@patrickrowan.com.au or phone 52 217655

At Patrick Rowan & Associates, we believe in educating our clients in areas that they need help with. We also have a saying, "the power of an idea is in its implementation" - we assist our clients to do this.

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