Investment allowance offers extra 30%

As part of the $42 Billion stimulus package, the Federal Government recently announced an Investment Allowance which could mean considerable tax savings for dentists and everyone else in business.

The allowance gives businesses a one-off tax deduction equal to 30% of the capital cost of eligible new equipment and motor vehicles costing $1,000 or more (NB: The turnover of the business must be less than $2 million p.a.). This applies to most new business assets including dental equipment, vehicles, furniture, fit-out and the like. What's more, the Investment Allowance is in addition to the standard depreciation practitioners already claim for such assets. For businesses with a turn-over of $2 million or more per annum, the allowance is available for assets costing $10,000 or more.

There are, however, some specific time-lines that apply which need to be adhered to. Items must be new and purchased or ordered between December 13, 2008 and June 30, 2009. Items must be installed and ready for use by 30 June 2010.

Steve Daley of finance broker Finlease is acutely aware of the pressures facing his dentist clients. He says "Principal dentists are usually very busy and very time-poor. It is little wonder that they sometimes have difficulty focusing on the needs of their business. New purchases get put off because they often cannot set aside the time. And then there is finance to arrange and other criteria to comply with.

"It is simply unrealistic to expect practice owners to get it right by themselves. Ironically, purchasing new technology or more advanced equipment that improves efficiency and work-flow in a practice delivers real and significant time benefits to the practitioner. Then he or she has a choice - see more patients or take some personal time".

He believes these new stimulus measures will have a significant impact. "These measures have come at a time of falling interest rates, where equipment and vehicles are being sold at heavily discounted prices, they are likely to have a profound effect on the bottom line of a number of practices".

Business owners need to seek their own advice, and at the time of going to press, industry was still awaiting the finer details of the investment allowance.

Given the 30 June deadline, many busy dentists are enlisting the services of specialists like Finlease. They have access a wide range of Banks & leading lending institutions to secure the funds needed in time. A specialist can visit you at your practice, and will handle everything from your application to approval to settlement and actively manage the whole process, whilst you do what you do best.

N.B. This is general information and does not take into account your specific circumstances. You should seek confirmation from your accountant.