Increased tax break proves popular, says NAB

Date: 28.05.2009

Small businesses are taking advantage of an increased tax break of 50 percent, NAB reports

Small businesses are taking advantage of an increased tax break of 50 percent, as investments continue to rise following the Federal Government’s Budget announcement, NAB reports.

Eligible businesses with a turnover of less than $2 million now qualify for the bonus, after changes were made to the vehicle and equipment investment allowance on May 12.

The new tax break applies to assets costing $1,000 or more which were acquired or ordered between December 13, 2008 and December 31, 2009 and will be installed by the end of December 2010.

NAB General Manager of Asset Finance David Taylor says many small businesses will be pleasantly surprised by the Government’s latest change.

"We’ve seen a number of small businesses acting to take advantage of the allowance since the initial announcement in March. No doubt this latest change will encourage more investment in the coming months," Taylor says.

"This is a tremendous opportunity to purchase new vehicles and equipment at what is effectively a discount.

"To fully understand the conditions of the offer, we suggest businesses seek thorough advice on the options available and how these purchases can be financed."

For small businesses looking to take advantage of the 50 percent tax break, NAB can provide funding solutions through hire purchase or an equipment loan.

Tax breaks may also still apply for businesses with a turnover of more than $2 million. Those businesses may claim:

An additional tax deduction of 30 percent of the cost (net of GST credits) of eligible assets of $10,000 or more acquired or ordered between December 13, 2008 and June 30, 2009, and installed ready for use by the end of June 2010
An additional tax deduction of 10 percent of the cost of eligible assets of $10,000 or more acquired or ordered between July 1, 2009 and December 31, 2009, and installed ready for use by the end of December 2010.

These tax breaks are available irrespective of whether a business has funded the acquisition by cash, equipment loan or hire purchase.

For businesses with a turnover greater than $2 million which lease assets, NAB will claim the investment allowance and pass on a benefit to the business through reduced interest rates.

"Asset finance specialists can be accessed in every NAB business banking centre around the country," Taylor says.

"Our asset finance specialists have expertise in the area of vehicle and equipment finance, specifically leasing, hire purchase agreements and equipment loans."