If you want to take advantage of the instant assets write off this year, tomorrow is the last day.
Here is an explanation of how it works, but let me first start off by saying I am not an accountant, and I do suggest you contact your accountant to discuss it.
If say you were to buy a computer system for $8,195 inc GST. The first point it does not cost $8,195 as 10% of this is GST which they will be getting straight back so the proposed cost is $7,375.50.
Under the old system
- 15% of this would be allowed as depreciation, which works out to $1,106.33.
- As the company tax rate was 30%, which means the business would get back $331.90 in income tax credits.
- This means the business needs to fund the purchase which needs to be arranged in the first year $7,043.60.
Under the new scheme
- 100% of this would be allowed as depreciation, which works out here to $7,375.50.
- The company tax rate under this scheme is 27.5%, which means the business will get back $2,028.63 in income tax credit.
- Which means that the business needs $1,696.36 less to fund the purchase which will be to it $5,347.24.
A fairly substantial saving.
Right now, we are getting a lot of interest in the rental of our software. The reason is people who need to upgrade soon have suddenly been realising that the End of the Financial Year is tomorrow. They want to take advantage of the accelerated depreciation of the equipment and as there is no time to prepare a lease, our rental is quick and easy to set up, so they are jumping on rental to not lose the tax benefits on the computers.
It you do not want to miss out, you need to contact us now.
