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Budget Boost – Immediate asset write off for small businesses

2015 budgetIf you are an eligible business that has an annual turnover of less than $2M you may be able to claim an immediate write off for any number of assets that you purchase that cost less than $20,000.

Please find below detail on the immediate asset write off.

Start Date:        12 May 2015, from 7:30pm

End Date:          30 June 2017

Eligibility:

‘Small Business Entity’ as defined by the tax office. Excluding GST Turnover of less than $2M in the previous financial year, as well as estimated turnover of less than $2M in the current financial year. If you subsequently go over the $2M threshold by years end, the concession is lost and you have to depreciate the item under normal rules.   Businesses cannot create separate, smaller entities to access the concession. Grouping/Aggregation rules catch business with similar ownership etc.

Asset Value:

$20,000 or less. The depreciation value of the asset generally excludes GST, but can include items like stamp duty which are normally added to the cost base of the asset. If purchasing a number of items on one transaction and the total amount is greater than $20,000 you may also qualify (for example manufacturing equipment for $100,000 that involves a number of separate items that are each under $20,000. Any items separately listed with a value less than $20,000 you may be able to claim each item)

Exclusions:

Some assets may be excluded, like Horticultural plants (grapevines), capital works to buildings and “In-House” software. There are different depreciation rules for these kinds of assets.

The above is a guide only as to our understanding of the announcement and we recommend that you check with your accountant or tax adviser to confirm your eligibility before proceeding with your purchase.

If we can assist with finance for your equipment purchase or you require any further information simply request a quote and one of our team will make contact with you.

Our car buying service could save you money!

Recently we teamed up with a car buying service to assist you our valued client in obtaining competitive pricing on the purchase of a new car. In the past you may have contacted or visited a car dealer and received a quote. Then contacted another dealer to see if you can do better. In some cases you still don’t know if you are receiving a good price on the purchase and if applicable the trade in.

The good news is that there is no charge for the use of the car buying service that provides unbiased advice and has access to a comprehensive dealer network.

If you are in the process of buying a new car it is as easy as providing us with the vehicle details being the make, model, fuel type (petrol or diesel), transmission type (auto of manual), your colour preference and details of any accessories together with details of your trade in (if applicable).

We will forward your details to the Car Buying service who will make contact with you to discuss.

Even if you have a quote from a dealer make sure you check with us.

If you agree to go ahead we will organise the finance for you as well.

To find out more please talk to us.

Company loses assets worth $1.4M Are you at risk?

If you own or finance equipment and on-hire it you could be at risk of losing that equipment if you haven’t registered your commercial arrangement on the Personal Properties Securities Register (PPSR),

A lot of people haven’t heard about the PPSR, or the Personal Properties Securities Act 2009 (PPS) itself (the name is confusing as it also applies to businesses and their assets), and the consequences of that ignorance could be dire.

What is the PPS?

The PPS is a Commonwealth Act which commenced on January 30, 2012 and introduced a national regime which replaced many existing schemes (including over 195 Acts and Regulations and 70 registers) which dealt with the registration of security interests over property in Australia. You may have been familiar with some state registers that were replaced — such as the Register of Encumbered Vehicles (REV) and the Victorian Securities Register, where financial interests over registered vehicles were held.

What is the PPSR?

The PPSR is the register where details of security interests in property can be registered and searched. It is administered by the Australian Financial Security Authority (AFSA), which says ‘personal property’ includes goods as well as intangible property and, in the case of business, may include inventory, shares, and plant and machinery.

Example of how you can lose your asset

The PPS goes one step further than previous legislation in that if you hire your asset to a third party on a handshake (or formal arrangement) and you are not correctly registered on the PPSR, if a receiver/liquidator is appointed to the third party they can take possession of the asset, sell it and keep the proceeds. You think I am kidding, right?

A recent court case last month proves the above, as reported by Andrew McLellan of EDX Australia, a specialist in the area of PPS. The case is Spiers Earthworks Pty Ltd – WA Supreme Court judgment, April 16, 2014.

“The receiver obtained a court order not only confirming that he was entitled to retain and sell the assets in his possession, but that Spiers Earthworks had to return all the assets that they had repossessed prior to the receiver being appointed,” he reported.

“Collecting your assets prior to the appointment of a receiver will not save you. Only correct PPSR registration can achieve this.

“The agreement commenced in 2010. The company that hired the assets had receivers appointed over it on July 24, 2013. Spiers Earthworks did not bother registering on the PPSR. Considerable legal fees were then spent by Spiers justifying why it didn’t need to register.

“Spiers explored two new defences to justify why it did not need to register. The first defence was that the receiver would be acquiring the assets for nil value, which was not on just terms. It also explored the defence of how the PPSR interacts with state laws. Both defences were knocked back by the judge. In simple terms, there is no sensible alternative to correct registration on the PPSR.

“Spiers is just one more example where the owner of valuable hire equipment has lost assets to an insolvency practitioner. The lesson to be learnt is that you need to register and you need to register correctly. Seeking expert PPSR advice to get the registration performed correctly will be far cheaper than paying solicitors to argue a potentially losing case with an insolvency practitioner.

“In Spiers’ case, they now have to pay both their legal fees and the legal fees of the receiver. In addition, they have lost assets with a value of more than $1,400,000. This is in contrast to correctly registering for $16 on the PPSR.”

 

So what can you do to protect assets?

  • Understand the PPS and ensure your interest is correctly registered on the PPSR.
  • Seek advice from your accountant or legal adviser
  • Use a company such as EDX Australia www.edxppsr.com.au

The website www.ppsr.gov.auprovides additional information about the PPSR.

For all your finance requirements make sure you talk to us.

Do you qualify for the Research & Development Tax Incentive?

The R & D Tax Incentive is a generous, easy to access entitlement programme available to eligible businesses of all sizes in all industry sectors.

The programme offers:

  • a 45 per cent* refundable tax offset fro most small to medium companies with an annual turnover of less than 20 Million dollars
  • a 40 per cent* non-refundable tax offset to other eligible businesses
  • a cash refund is available to eligible businesses
*The Australian Government has announced it’s intention to change the tax rates of assistance  to 43.5 and 38.5 per cent respectively. This change requires legislation.

To find out more about the R & D Tax Incentive Click here