It has never been more financially rewarding to own a professional JURA coffee machine for your small business; be it an office, restaurant or hair dressing salon.
Recently the ATO has increased the depreciation threshold from $1,000 to $20,000. This means that all small businesses wanting to purchase a JURA coffee machine will now receive an immediate tax deduction on any coffee machine they buy costing less than $20,000 until the end of June 2017.
Small business owners can now bring forward investment plans for the assets which will contribute to the growth and future stability of their business. Unlike previous laws, small businesses can claim the deduction in the year in which the asset is installed ready for use; as opposed to spreading assets across years for tax purposes.
How this will help small businesses invest in a professional JURA coffee machine
Melinda owns and operates a small restaurant in suburban Melbourne, with an annual turnover of less than $2 million. Melinda purchases a new GIGA X9 Professional for $8,250 for her customers and staff to enjoy while they are dining at the restaurant.
Previous Law
As this new asset exceeds the previous $1,000 threshold, only 15% or, $1,238 of the new $8,250 cost would be depreciated in the first year. With a company tax rate of 30 percent, this means that Melinda would only get back $371 on her tax in the first year.
New Law
With the new $20,000 threshold, Melinda will be able to claim an immediate deduction for her new JURA coffee machine, with an immediate deduction of $8,250. Given the new small business company tax rate of 28.5 per cent from 1 July 2015, Melinda’s restaurant will now get $2,351 back on its tax.
Cash Flow Benefit
With the new $20,000 depreciation threshold, Melinda will receive an additional cash flow benefit of $1,980.
| |
Previous Law |
New Law
|
Additional Benefit
|
| Depreciation deduction |
$1,238
|
$8,250 |
$7,012 |
| Cash Flow Benefit* |
+ $371 |
+ $2,351 |
+ $1,980 |
*Figures are indicative only, please seek financial advice before making any substantial investments