Small Business Advice – Accelerated Depreciation
Hi, Bob Aldons, The Car Guy and owner of Car Business, reporting on the Federal Governments Accelerated Depreciation program. If you don’t want to read any further, just call me on 0418 748 498. I’m happy to discuss this matter with you directly.
In the May 2018 Budget, Treasurer Scomo, Scott Morrison, announced an extension of the government’s incentive for small business, the Accelerated Depreciation for Small Business Entities. This is of course when and if the budget receives approval through the layers of Government bureaucracy.
Here’s a quote directly from the ATO website
“The write-off threshold of $20,000 has been extended to 30 June 2018.
If you buy an asset and it costs less than $20,000, you can immediately deduct the business portion in your tax return. The $20,000 threshold applied from 12 May 2015 and will reduce to $1,000 from 1 July 2018.
You are eligible to use simplified depreciation rules and claim the immediate deduction for the business portion of each asset (new or second hand) costing less than $20,000 if:
- you have a turnover less than $10 million (increased from $2 million on 1 July 2016), and
- The asset was first used or installed ready for use in the income year you are claiming it in.
Assets that cost $20,000 or more can’t be immediately deducted. They will continue to be deducted over time using the general small business pool. You write-off the balance of this pool if the balance (before applying any other depreciation deduction) is less than $20,000 at the end of an income year.
Remember, registered tax agents and BAS agents can help you with your tax.”
I had a conversation with a customer about this matter a couple of weeks ago. Lydia and Sean were contemplating buying a 2016 Honda Civic Sedan through their business. When I suggested to them that they could depreciate the total value of the transaction in this financial year, they were a bit confused. I explained the accelerated depreciation model to them and suggested that they discuss it with their accountant.
Another customer was buying a new Kia Cerato Sport Hatch for $21500 drive away. Again, when I suggested to her accountant that the total value could be split between the vehicle value and the on-road costs, he recalled the rules of Accelerated Depreciation.
Here are the facts.
The value of any item – car, machinery, office furniture, computer equipment – can be immediately depreciated 100% in this financial year if that value (net of GST) doesn’t exceed $20,000. So if you have already or are thinking about purchasing an asset through your business, do it before June 30th 2,018 and lock in the deductibility. It’s really a no-brainer.
If you’re contemplating the purchase of a new car for your business, and the value of the purchase, excluding on-road costs and GST is $20,000 or less, you should get in touch with me quickly.
I can help you to buy your car at thousands of dollars less than a new car dealer will sell it to you at.
Remember – Dealers want to make as much as they can from you. That’s the way they run their business
At Car Business, it’s my job to buy your next new car at the cheapest possible price. That’s the way I run my business.
The easiest way to find out more about Accelerated Depreciation is to call me on 0418 748 498 or at the very least urgently discuss this matter with your accountant
Remember to drive carefully
Bob Aldons is the owner and founder of The Car Guy, reviewing cars, reporting on Car Industry Matters, Car Tech and the world at large. He’s spent the last forty years immersed in the automotive industry from salesman to the owner of a 7 brand multi-franchise dealership. Bob knows cars.
If you’re hunting around for a great price on your next new car, you should call the auto expert, Bob Aldons from Car Business. My company, a car Broker, Car Buyers Agent or Car Buyers Advocate based on the north side of Brisbane, will return your inquiry within 24 hours and make the process of buying a new car easy and stress-free. Are you tired of salesperson tricks? I protect you from the pressure exerted by car dealer’s salespeople. There isn’t any obligation – just a pretty significant saving.
You’re where? Seriously, my services are available for you in any Australian state and territory: from Darwin to Hobart, Cairns to Perth. Car Broker Brisbane, Sydney, Melbourne, Adelaide, Perth, Hobart, and Darwin – I’m available when you need me to be.
Here’s an example
Matt wanted to purchase a Mazda 3 SP25 GT Manual Hatch. The retail value, drive away on that car is around $35,000. Car Business managed to purchase the same car for $28, 123.90 and with our fee Matt paid $25, 588, a saving of over $6000. And how do we know? Another customer, (looking for a new Holden HSV) just paid $35,000 for the same car – but he did it himself, without our assistance
If you’ve got a vehicle to trade, we have some clever ways to maximize the value – from used car dealers keen for your car to assist you to sell it privately. Finance and Insurance? We can handle that too, and we promise you will not be paying exorbitant dealer markups there either.
Trade In Value Example
2014 Jeep Cherokee Limited. Average dealer trade value – $16500. We achieved $22,000
2014 Volkswagen Tiguan 118TSI. Average dealer trade value – $14000. We achieved $16000
So, to get the best new car price, talk to others and then talk me. I’ve got the experience to handle the dealers and achieve the lowest new car prices. If you think you’re entitled to fleet pricing, I can often get better than that too. Whether you’re a small fleet or a large national fleet, Car Business will go to work and get that price down. Lower new car prices are my goal. So you’ll get the best prices from us rather than hoping you can help yourself.
If I can’t get you the best new car price, better than you can get yourself from a car dealer, we won’t charge you any fee. No Saving, No Fee. – that’s what you should expect from a car buying expert.
Car Business WILL save you money on your next new car purchase – guaranteed
The Australian Road Safety Foundation is a not-for-profit organization whose charter is to reduce serious accidents on our roads through training and education. Car Business donates to the ARSF for every car we sell. If you’d like to support this worthwhile foundation, donate to the cause, become a member today or just buy your next new car from Car Business
My reviews aren’t based on power performance or high-speed handling capacity. They’re not based on 0-100 Kim/hr of 4.0 seconds. And they’re certainly not super luxury vehicles that many other “old timers” are feted on by the likes of Ferrari, Lamborghini, and Aston Martin
Back when I started in the motor industry salespeople were schooled and skilled in a process called the road to the sale. Part of that process was a presentation of the car that the customer was ultimately considering,
The six position sell showed the features, advantages, and benefits as it related to that specific car in the eyes and thought process of that particular customer
Those days of a true car sales professional seem to have gone.
Nowadays it seems that all salespeople want to do is accept that the customer knows everything about the car they’re interested in, want to crunch the customer as quickly as possible and get onto the next sale
In my opinion, this is one of the reasons that there’s such a high turnover in salespeople in this industry of ours.
Now I think that I’m a car industry expert, not because I sell lots of cars, but, as I was taught over 40yeras ago, time sells motor cars.
The more time you spend with a customer, the more information you provide them and the more you’re there for them Even AFTER they take delivery of their new car, the more repeat and referral business you’ll get.
Typically second and subsequent sales only provide 10% of a car salespersons business. Referral business, where an existing customer refers a friend, relation or work colleague back tot eh selling salesperson as someone to trust and buy a car from is even less – probably 5%
So, if you’re a young salesperson reading this article, let me tell you that you should be getting 40-50% of your business from repeat and referral business.
And how do you get that much? Well, that’s a story for another article or an opportunity to join me in a training course.
For your interest, my motoring reviews are my opinion of the vehicle I’m testing. The manufacturer or distributor, in this case, Kia Australia, doesn’t tell me what to write or ask for a ‘nice’ review. Nor am I paid for these reviews – I simply call it as I see it.
I often wonder about the ‘truth’ that I see from other motoring journalists. And I’m particularly referring to newspapers, online forums, and magazines where the company that owns the publication receives substantial advertising support from the various manufacturers.
Do the owners or editors tell their journalists to go easy on the review? I’m not sure, never having been in that position. Would I turn to softer reviews if my company was being paid for good reviews? Not likely. My independence as a writer is not for sale. I’d rather say no than be bought.
In any case, If that ever happens, rest assured that I’ll be telling that story with interest.