For more information, please visit https://www.unitedequipment.com.au/new-tax-incentives-for-australian-businesses/

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To make it easier, we’ve explained some of the tax incentives being offered to businesses below.

$150k Instant Asset Write Off

From now until 30^th June 2020, small to medium sized businesses can instantly write-off assets up to $150,000, which is a significant increase from last years’ $30,000 limit.

Businesses can reduce their tax for this financial year by claiming the full cost towards reducing their taxable income. This could result in thousands of dollars saved for this financial year.

Furthermore, there is no limit to the amount of assets businesses can claim under this incentive. Businesses can purchase multiple assets, the only criteria is that an individual asset must not cost more than $150k.

Does my Business Apply for this Tax Incentive?

Any business can claim the offer if they have an aggregated annual turnover of less than $500 million. This is valid until the 30^th June 2020.

What Type of Assets Dose this Apply to?

The tax incentive refers to any asset, new or used, that is involved in running a business. This includes assets like forklifts and access equipment.

50% Instant Depreciation for Assets

This is a limited time 15-month investment incentive allowing businesses to accelerate depreciation deductions.

Businesses can deduct 50% of the cost of eligible assets purchased or installed after 12th March 2020 and before 30 June 2021. There is no asset value threshold on this offer. This means that any business with an aggregated turnover of less than $500 million can apply.

New Equipment Offers

The increase to the asset write-off threshold to $150k and 50% instant asset deprecation is good news for business. This allows businesses to invest in a greater variety of assets that may have fallen over the Government’s previous $30k threshold. United has an extensive range of forklift and access equipment floor stock available that are eligible for the above tax incentives. The new equipment available across our branches include;

• New Cat Forklifts
• New Access Equipment

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These changes will give small to medium-sized businesses the opportunity to instantly deduct multiple asset purchases costing less than $30K from the 2nd of April 2019 until 30th June 2020. For the full details, read the Budget 2019/20 report.

How does the $30K Instant Asset Tax Write-Off Work?

When a small-to-medium sized business purchases an eligible depreciating business asset under $30K, they can claim the full cost towards reducing the taxable income for that financial year. This can result in thousands of dollars saved in tax payable for that business. Let’s explain this further by using an example of a hypothetical business in which this tax incentive could apply.

Example: Joe’s Fruit & Vege Market

Joe Smith owns a company, Joe’s Fruit & Vege Market, through which they operate several store’s in Perth, employing 12 staff. Joe’s Fruit & Vege Market has an aggregated turnover of $1.2 million and a taxable income of $105K for the 2018-19 income year. In order to move stock efficiently, Joe has decided to purchase a new CAT 1.8 tonne LPG forklift for one of his stores, priced at $23,990, exclusive of GST.

Under the new $30K instant asset write-off scheme, Joe’s company is eligible to claim an instant deduction of $23,990 for the purchase of his new forklift. This means that Joe can use the cost of this asset purchase to decrease his companies taxable income and thereby decrease his tax payable. This can potentially lead to thousands of dollars saved and increase his available cash flow.

*This example is general in nature and only used to demonstrate how the accelerated depreciation scheme may apply to a business. This doesn’t take into consideration a business’s personal situation or circumstances, neither should this be taken as financial or tax advice. We recommend businesses seek professional advice from their licensed financial advisor or accountant for eligibility.

$30k Instant Tax Write-off FAQ’s

Does my business qualify for this tax benefit?

If you business has an annual turnover of less than $50 million, then your business qualifies and can instantly write off assets purchased this financial year costing less than $30,000.

What kind of assets can I claim a deduction on?

The scheme refers to any asset involved in running a business. This applies to new and second-hand products.

Does the $30K include or exclude GST?

As summarised by the Australian Taxation Office:

• If a business is registered for GST, then the GST will be excluded from the cost of the asset.
• If a business is not registered for GST, then the GST will be included in the cost of the asset.

United Forklifts – EOFY Sale

The 2018/19 Financial Year is coming to an end, and now is the perfect time to purchase or upgrade your equipment with the current $30K instant asset write-off scheme.

We are offering a selection of new forklifts for a special price of under $30K, perfect to save up to thousands of tax payable dollars. Click here to find out more.

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This scheme was due to end on 30^th June 2017 but it has now been extended to 30th June 2018.

What classifies a Small Business?

A small business is any business with an annual turnover of less than $2 million dollars.

However, from July 1^st 2016 the government increased this threshold to $10 million dollars (aggregated turnover) to provide further support. This means the scheme is now available to a further 90,000 businesses across Australia for this financial year. For full details read the Budget 2016/17 report.

Does the $20k Small Business amount include or exclude GST?

As summarised by the ATO,

• If a business is registered for GST, then the GST will be excluded from the cost of the asset.
• If a business is not registered for GST, then the GST will be included in the cost of the asset.

What assets can I claim a deduction on?

The scheme refers to any asset involved in running a business. This applies to new and second hand products as outlined in the ATO fact sheet.

Asset examples

• If you are a trade business such as a builder, electrician or painter, this could include the tools and access equipment that you use every day for your business.
• If you are retailer or warehouse owner, this could include pallet trucks, order pickers, forklifts or anything used to move pallets and lift products.

So how does this $20k Small Business Instant Asset Write Off work?

When a small business purchases an eligible depreciating asset under $20k, they can claim the full cost towards reducing the taxable income for that financial year. That can result in thousands of dollars saved in tax payable for that small business.

Example

Tony Smith purchased a scissor lift and trailer for $19,890 for his electrical company this financial year. He uses this scissor lift for work purposes only. The company’s total assessable income for 2016/17 comes to $250,000. Tony’s company is eligible to immediately write off the total cost of the asset this financial year. Let’s illustrate this below.

XYZ Electrical Pty Ltd

• $250,000 (assessable income) – $19,890 (deductions) = $230,110* (taxable income).
• This means the company’s taxable income will now be reduced to $230,110 instead of the full $250,000.
• Applying the small business company tax rate of 27.5% on the Tony’s taxable income of $250,000, the tax payable would be $68,750.
• If he uses the eligible asset to reduce the taxable income, 27.5% on Tony’s taxable income of $230,110 will now only be $63,280. That’s a tax saving of $5,470*.

*This example is general in nature and only used to demonstrate how the accelerated depreciation scheme may apply to a business. This doesn’t take into consideration a business’s personal situation or circumstances. We recommend businesses seek professional advice from their licensed finance advisor or accountant for eligibility.

Eligible products United are offering

To further promote this great incentive, United is offering a range of products under $20k to help small businesses.

Small Business Offers under $20,000

CAT LPG forklifts

Elevah Electric Ladder & Stock Pickers

Haulotte electric scissor lift and trailer package

PLUS any of our used forklifts for sale under $20k

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