Planning to grow your business?
Our Business Specialists often hear from small business owners about a common dilemma. Do they take the plunge and buy new equipment to help improve efficiency and profits? What happens if they buy a work vehicle and then things slow down? With the economy picking up and tax breaks available can they afford not to reinvest in their business?
Instant tax break
Something that caught my eye earlier this year was a national survey by Officeworks and H&R Block that might help swing a decision for the 200,000 small business customers who bank with us. The survey revealed that 78 per cent of Australian SMEs don’t fully understand what the $20,000 instant tax break is. This tax break is only available to small businesses, or businesses with an aggregated turnover of less than $10 million. Officeworks helpfully pointed out all the great things you could buy for your office in the lead up to June 30, but what many didn’t fully grasp was that the tax break also applies for second hand vehicles and equipment – provided it is less than $20,000. This probably explains why there are so many well equipped utes getting around on our roads at the moment.
Beaut Ute or better service offering?
You can buy a second hand ute for $15,000 and spend another $4,999 on kit for the vehicle. If you’re a landscaper, fitting a tipping tray to your ute means that you can vastly improve productivity and save time. If you run a café or restaurant, that $20,000 could buy you a very good vintage expresso machine and other equipment to set your service offering apart from others – and let’s face it, if you don’t serve the sort of coffee that Australians expect these days customers won’t necessarily let you know, but they’ll give you a free quality assessment to all their Facebook friends!
Will it last?
The $20,000 write-off threshold has been extended until 30 June 2019, so it’s worth understanding more about how your business might benefit from this concession. There is no guarantee that this generous write-off will survive beyond June 30 next year, so if you are thinking about investing in your business over the next few months, please contact one of our Business Specialists for personalised advice.
Senior Manager Small Business
Bendigo and Adelaide Bank
This information contains general advice only. The views of the author may not represent the views of the broader Bendigo and Adelaide Bank Group of companies ("the Group"). This information must not be relied upon as a substitute for legal, tax or other professional advice.