Manufacturing News

Latest 30% tax allowance will be great timing for NMW

The Federal Government’s just-announced 30% business tax break means that purchases of manufacturing-related products will become significantly cheaper for companies looking to invest in their future.

And its timing — for all investment purchases until June 30, 2009 — means that National Manufacturing Week, to be held at the Melbourne Convention and Exhibition Centre from May 12-15, presents an ideal opportunity for everyone in the manufacturing sector, according to exhibition organiser Reed Exhibitions.

“Businesses looking to increase productivity, reduce costs and become more efficient will find NMW 2009 a perfect opportunity to look at the latest technology and innovations — and take advantage of the investment tax break,” said Paul Baker, Reed Exhibitions’ exhibition manager for the show.

“It will help reduce the cost of new equipment purchases for manufacturers, workshops and suppliers, with its timing — expiring on June 30 this year — providing another strong incentive to visit NMW.

“This government initiative gives everyone in the manufacturing sector a compelling reason to attend the show, providing one of the last — and best — opportunities to make investment decisions and place orders which will attract the allowance,” he said.

The federal government’s $42 billion Nation Building and Jobs Plan announced on February 5 includes an investment tax break for all Australian businesses, designed to help boost business investment, bolster economic activity and support jobs.

Under the government’s plan (which was passed by the Senate on February 12) businesses — such as manufacturers, fabricators, workshops, warehouses and many others — will be able to claim a bonus deduction of 30% for eligible assets — including manufacturing, processing, electronic, IT and other capital equipment — costing $10,000 or more.

Small businesses with a turnover of $2 million a year or less are eligible for the tax break on items costing $1000 or more.

To be eligible for the investment allowance, businesses must

• acquire or start to hold the equipment under a contract entered into between December 13 2008 and the end of June 2009 and

• have it installed ready for use by the end of June 2010.

For eligible assets purchased between July 1, 2009 and December 31, 2009, the bonus deduction drops to 10%. These deductions are on top of the usual capital allowance deduction claimable for the asset as part of a business’s income tax return.

As an example, under the 30% business tax break, a piece of fabricating equipment costing $100,000 will be eligible to claim a deduction of 30% of that $200,000 — or $30,000. At the standard company tax rate of 30%, that would equate to a reduction in tax for the 2008-09 financial year of $9000.

“We will have a number of exhibitors at NMW 2009 — including representatives of federal government agencies — who can advise visitors on just how the 30% tax break incentive works and how it would apply to their businesses,” said Baker.

For more detailed information on how the Investment Allowance may apply to your business, contact the ATO on 132 866 or accountant or financial advisor.

Further information on NMW call John Delpech on (02) 9422 2568, email john.delpech@reedexhibitions.com.au, website www.nationalmanufacturingweek.com.au.

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