The Australian Taxation Office passed tax legislation in 2012 that favoured small and medium businesses with a $20,000 tax break. All businesses that have a turnover of less than $2 million are able to benefit.
It is only temporary so make sure you take advantage if you qualify.
History of the $20,000 tax break
Before the tax break was introduced the allowable write-off of a capital purchase would be up to a threshold of $1,000, which kept competition static between the smaller businesses and their medium to larger sized competitors.
The government introduced the tax break to help improve the small business community and to help them invest in capital equipment such as vehicles, land, and long-term assets.
This tax break drive will continue to help small businesses grow whilst giving them more confidence investing in capital assets, creating more jobs, and improving the local community.
In the past, each financial year the budget would produce little reward for small and medium sized businesses. This tax break was introduced in 2012, bringing to an end one of the longest droughts in budget improvements for SME’s owners.
How Can the Tax Break Help Businesses by Investing in New Refrigeration Units?
This new tax incentive favours businesses in such a big way that they are able to invest in capital equipment:
- Vaccine refrigerators, commercial refrigerators and medical refrigerators are good examples of capital equipment.
- Vaccine refrigerators will help store vaccines and other medical products so that they don’t become obsolete or don’t degrade.
- In certain circumstance, a business could be located in extremely harsh environments where electricity may be an issue. However, they can invest in solar power generators to connect vaccine refrigerators and medical refrigerators to help store vaccines.
- The tax incentive has also helped businesses to purchase purpose-built vaccine refrigerators. The purpose built refrigerator has a lot of advantages compared to the domestic refrigerators;
- The management of the unit is simpler and produces a more uniform cooling
- Vaccine refrigerators have alarms that will alert you whenever certain limits are breached, whether high or low-temperature limits.
Features of the tax break
Small businesses can claim an immediate deduction for all the assets that are depreciating with values of $20,000 or less as long as the asset was acquired at a specified time in which the legislation was made.
Check with your financial adviser for further details.
The $20,000 tax break has really helped a lot of small and medium businesses and continue to do so. The break though has not been guaranteed to last long and only extensions of one year are given, but businesses make the most out of it while it lasts.
** Please seek financial advice from your respective financial adviser before purchasing a capital asset. This article is not providing financial advice. **