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Capital expenditure can yield significant benefits to small businesses

Investing in business asset means putting your money to work which could potentially earn a better return over the longer term. Investing in certain capital assets not only meets changing business needs but also increases efficiency, productivity, improve safety and security which in turn improves the value of the business.

Don’t forget the tax benefits that you can take advantage of:

If your business wants to purchase assets such as a commercial motor vehicle, plant, equipment, office furniture, machinery and tools, are some potential tax deductions that you can claim when you do your tax return.

Depending on the asset, you may qualify for claiming the full cost of the asset (including the cost of installation) or claim the cost of the asset over a period of time, commonly known as tax depreciation. There are various depreciation methods that may be used to calculate tax depreciation depending on your business situation.

You can claim the cost of repair, maintenance and other running costs of the assets.

If you have finance tied up with the asset that your have purchased, you can claim the interest and the borrowing cost over the term of the loan.

However, the decision to invest on plant and equipment depends on various aspects such as availability of initial cash outlay, existing line of credit, etc.

Talk to Accountants at Equity Flare via email or call us on 08 8359732, to make better business decisions.