New Government Incentives Announced
With Australia facing economic uncertainty, Prime Minister, Scott Morrison, has announced a tax package to stimulate the economy.
The plan will cost the government $17.6 billion in total, with $11 billion of that to be spent before June 30, 2020.
Accelerating depreciation deductions
The government is introducing a 15-month time limited investment incentive to support business growth over the short-term to recover from the economic downturn.
The incentive will enable businesses to deduct an additional 50 per cent of the asset cost in the year of the purchase. This incentive is set to cost the government $3.2 billion and will be available until June 30, 2021.
Enhancing the instant asset write-off
The government will also inject $700 million to increase the instant asset write-off threshold, increasing from $30,000 to $150,000. The instant asset write-off allows you to claim any suitable purchase as a deduction through your tax return.
Access to the write-off has been expanded to include businesses with an annual turnover of less than $500 million, up from $50 million.
This proposal applies until 30 June 2020, for new or second-hand assets first used, or installed ready for use, in this timeframe.
Cash flow boost for employers
To assist small-medium businesses that employ staff during the economic downturn, the government will provide tax-free temporary cash flow support.
Businesses with turnover of less than $50 million will receive payments of up to $25,000 tax-free, with a minimum payment of $2,000. The payments will be benchmarked to 50 per cent of the amount withheld on employees’ salary and wages.
Even if they are not required to pay tax, eligible businesses that pay salary and wages will still receive a minimum payment of $2,000.
Why you should install solar as your instant asset write-off
The instant asset write-off of $150,000 makes the financial side of installing a commercial solar PV system significantly more achievable. The savings your system generates for your business will only increase over time, as the threat of continued electricity price rises poses significant challenges for Australian businesses. Installing a commercial solar PV system represents a solution which can significantly reduce electricity costs from day one.
On top of this, you’re still able to claim government incentives, meaning your out-of-pocket cost could be considerably less than the write-off figure.
Benefits of Solar
High Investment Returns
Solar is a significant financial investment, and at Infinite Energy we treat it as one. To ensure your business makes the right financial decision, our customised proposals address capital outlay, investment yields, payback periods, NPV and more.
Reduce Business Risk
Due to rising electricity prices, business owners face considerable uncertainty surrounding their power costs. Installing a solar PV system allows your business to produce a portion of its own electricity requirements on site, thus removing some of this uncertainty. This allows you to make business decisions more confidently, knowing one of your largest expenses is under control.
Reduce Carbon Emissions
Installing a commercial solar PV system will help your business significantly reduce its carbon emissions. Plus, because your solar electricity is generated on-site with no transmission losses, it offsets even more than it generates.
Being seen as a green company is a great PR and marketing tool, making your business more attractive to both staff and customers.
If you’d like to take advantage of the small business instant asset write-off before 30 June 2020, please contact us today and we will provide you with a customised quote.
Please note, you should always seek your own accounting and financial advice.