By Joel Montgomery // 25 March 2009 // Related Categories: Tips

On the 19th March 2009 the Treasurer introduced a small business tax break in the House of Representatives that will allow small businesses to write off 30% of the value of most new assets worth over $1,000 and purchased new between 13th December 2008 and 30th June. Should this bill pass through Parliament, and it's likely it will, small businesses will have a big incentive to bring forward their I.T. hardware purchases to this financial year (note the Bill only applies to tangible assets so software is excluded).

Let's say for example, that a small business needs to buy a new server. By utilising PowerBuy  and the additional 30% tax break, here's how the maths would work:

  1.  Purchase a new, quality Dell server on sale for $2,000 (at time of writing Dell has a 20% cash-off sale on servers, normal RRP $2,500)
  2.  Apply a PowerBuy coupon and reduce the price by a further 20%. New price $1,600
  3.  Claim a 30% tax deduction on the value of the item in the first year. Net cost after tax saving $1,456 (may vary depending on your tax circumstances)

Paying $1,456 on a retail price of $2,500 works out to be a saving of almost 50%! Not bad for a few minutes work. Note that the criteria for claiming the tax break varies depending on your business turnover and there are other conditions you should be aware of before you pull out your credit card. See here for the FAQs released by Treasury

A great summary of IT-related tax tips to reduce your taxable income on is here

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