Something that many people may not realise is that you can claim an additional 30% deduction on new (or near new) cars that are purchased before 30 June 2009.

The law was introduced in March this year during the government’s bonus bonanza and probably came just in time to help the diminishing car industry from it’s increasing threat of total meltdown. Over the next could of months, or until the end of June 09, you can not only grab yourself an absolute bargain at the dealerships and car yards, you can also take advantage of the government’s deduction.

To help with the finer details, we have been helped by Vincent Uno from Platinum One Accounting in Sydney. If you find these details useful, please show your support by visiting their website and contacting them for further advice.

Details of the Small Business & General Business Tax Break Bill 2009, eligible businesses are entitled to a ‘one off’ bonus tax deduction equal to 30% of the cost of the new car, as long as they meet the applicable investment thresholds and are:

• Used in carrying on the business
• Acquiring between Dec 13, 08 & June 30, 09 and
• Operational by June 2010

If you cant make your mind up by  June 30, you can still receive a deduction equal to 10% of the cost from July 1 to Dec 31, 2009.

Sometimes this sort of thing is hard to digest, so here’s an example of what you would expect based on buying a $50,000 car:

Bought before 13/12/09 = $12,500 depreciation

Bought btween 13/12/08 - 30/06/09 = $27,500 depreciation

Or bought between 01/07/09 - 31/12/09 = $17,500 depreciation.

That should give you an idea to work with for your ‘paper write offs’ for this year if you are looking at buying a car. I will be looking at it while the industry is down and the deductions are up. Make sure you do the maths before buying a new car, so if it pays off in the long term then seriously consider it.

I hope this helped, and please make sure you look out for Platinum One Financial Services and contact them for any information on these types of issues.

PD