Small Business $5,000 Tax Write-Off on New Cars
The 2011/2012 budget announced a new tax deductions for small businesses buying new motor vehicles from 1st July 2012.
In simple terms any new vehicles purchased will get an immediate $5,000 tax write-off above and beyond the usual depreciation schedule in the first year (1st July 2012 through to 30 June 2013).
For example:
A small business purchases a new vehicle for $40,000 in the tax year 2012-2013.
Normally the business could depreciate/write-off 15% in the first year – $6,000 – however with this new legislation, the business will be able to claim an immediate $5,000 plus 15% of the remaining portionof $35,000 (being the purchase price less the up front write off). So in this case the business owner will be able to write off $5,250+$5,000=$10,250 in the first year.
This equates to an extra write off of $4,250 (normally $6,000 would be the total deduction, being 15% of $40,000) which equates to a net tax benefit of $1,275 in 2013-2014.
This incentive is estimated to cost around $350 million over two years.
For any queries or information on how it works, please contact a Private Fleet consultant on 1300 303 181
Level 2, 9 Help Street