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May 2009 Automotive Accountants' Forum

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May 2009 Automotive Accountants' Network Forum that included topics on 2009 Australian Federal Budget, ACCC (new) Pricing Legislation - use of fine print, Australian Government's Stimulus Package for …

May 2009 Automotive Accountants' Network Forum that included topics on 2009 Australian Federal Budget, ACCC (new) Pricing Legislation - use of fine print, Australian Government's Stimulus Package for business.


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  • 1. Automotive Accountants’ Network Forum For Accountants. By Accountants.
  • 2. “ Is It or Isn’t it?” 19 May 2009 Presenter: Angelo Sirianni, Colledge’s FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 3. This presentation has been prepared by Colledge’s for the general information of its clients and seminar attendees. While the information herein has been prepared with all reasonable care and derived from sources believed to be accurate, no responsibility or liability is accepted by Colledge’s or any of its affiliations, for any errors or omissions including liability to any person of negligence or otherwise. Recommendations may not be appropriate in all circumstances and clients must consider their own personal objectives and financial advice before acting on recommendations in this presentation . Colledge’s (ABN 52 439 950 641) FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 4. Quotes of the day Sure there have been injuries and deaths in boxing, but none of them serious. - Alan Minter, Boxer A billion here, a billion there, sooner or later it adds up to real money. - Everett Dirksen, Congressman   I have opinions of my own --strong opinions-- but I don't always agree with them. - George Bush, former U.S. President FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 5. Federal Budget 2009
    • References:
    • ANZ Economics & Markets Research, electronic newsletter “Federal Budget Report”, 13 May 2009
    • Thomson Reuters’ Weekly Tax Bulletin, Issue 19, 12 May 2009 “Special Issue – 2009 Federal Budget Report”
    FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 6.
    • Economic summary
    • Deficit 2009-10 $57.6 bn 4.9% of GDP
    • Deficit 2010-11 $57.1 bn 4.7% of GDP
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 7.
    • Economic summary (cont)
    • Deterioration due to ‘hit’ on revenue
    • Result from economic backdrop being weaker
    • Discretionary policy spending
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 8.
    • Economic summary (cont)
    • Government forecasting a ‘mild’ recession
    • Australian economy to reduce by 0.5%
    • Recovery in 2010-11 to 2.25% growth
    • Projected GDP above 4.5% in 2011-12 and 2012-13
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 9.
    • Economic summary (cont)
    • “ Underlying cash balance is not expected to return to surplus until 2015-16” (ANZ Federal Budget Report)
    • Based on projected GDP growth in 2011 to 2013
    • Recovery in revenue will occur “naturally”
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 10.
    • Economic summary (cont)
    • Most spending focused on investment, infrastructure, education and health
    • ANZ estimates that the Budget “will add 0.75% to GDP in 2009/10 and 0.25-0.5% in 2010-11”
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 11.
    • Economic summary (cont)
    • Net debt is expected to peak at 13.8% of GDP in 2012-13
    • Low by international standards
    • Debt expected to decrease to 3.7% of GDP by 2019-20
    • The Budget will not have a repercussion on our “AAA” credit rating, according to rating house Standard & Poors
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 12. Federal Budget 2009
    • Tax Budget measures
    • Superannuation concessional caps cut to $25,000 from 2009/10
    FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM Residents: Personal tax rates and thresholds Current From 1 July 2009 From 1 July 2010 Taxable income Rate Taxable income Rate Taxable income Rate ($) (%) ($) (%) ($) (%) 0 - 6,000 0 0 - 6,000 0 0 - 6,000 0 6,001 - 34,000 15 6,001 - 35,000 15 6,001 - 37,000 15 34,001 - 80,000 30 35,001 - 80,000 30 37,001 - 80,000 30 80,001 - 180,000 40 80,001 - 180,000 38 80,001 - 180,000 37 180,001+ 45 180,001+ 45 180,001+ 45 Low income tax offset 1,200 1,350 1,500
  • 13. Private Health Insurance rebates and surcharges (effective 1 July 2010) Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM Singles Couples Rebate Surcharge Tier 1 > $75,001 > $150,001 20% 1% Tier 2 > $90,001 > $180,001 10% 1.25% Tier 3 > $120,001 > $240,001 - 1.5%
  • 14.
    • Parental Leave
    • Births and adoptions on or after 1 January 2011
    • Parents able to lodge claim from 1 October 2010
    • 18 weeks (after birth) Leave at Federal minimum wage
      • Currently $543.78 per week
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 15.
    • Parental Leave – eligibility
    • Worked at least 10 out of 13 months (continuously) before the birth
    • Worked at least 330 hours/~1 day per week within the 10 months
    • Adjustable taxable income of ≤ $150,000
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 16.
    • Parental Leave – eligibility (cont)
    • Employers will act as “pay master”
    • Government will fund employers for employee payments
    • Parents will still be eligible for Parental and Annual Leave paid by employers
    • Available to contractors, casual workers and self-employed
    • Payments will be taxable
    • Superannuation is not (currently) included
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 17.
    • Small Business
    • Small business tax break up to 50% from 30%
      • Use of non-commercial losses restricted – applicable 2009-10 financial year
    • ATO strategic compliance package
    • Indexation of ASIC fees from 2010-11 income year
    • Do Not Call Register – expanded to businesses
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 18.
    • Small Business (cont)
    • Division 7A to apply to use of assets
      • Applicable from 2009-10 financial year
      • “ Div 7A deemed dividend rules extended to licence or right to use real property and chattels such as cars, boats and real estate” (Thomson Reuters Weekly Tax Bulletin)
      • Decrease extent of shareholders or associates being allowed to use assets for free
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 19.
    • First home buyers
    • Grant extended for an extra 6 months
    • Contracts: 1 July 2009 to 30 September 2009
    • FHOB* $7,000 established + FHOG** of $7,000 = $14,000
    • $14,000 new + FHOG of $7,000 = $21,000
    • Contracts: 1 October 2009 to 31 December 2009
    • FHOB $3,500 established + FHOG of $7,000 = $10,500
    • $7,000 new + FHOG of $7,000 = $14,000
    • *FHOB = First Home Owners’ Boost **FHOG = First Home Owners’ Grant
    Federal Budget 2009 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 20. ACCC New Pricing Legislation
    • References:
    • Article: “Laws crack down on advertisers’ use of fine print”, Creedy.Steve, The Australian, 7 May 2009
    •   Article: “Alarm bells on ad rules”, Lord.Philip, Go Auto News, 6 May 2009
    •   www.accc.gov.au (accessed 7 May 2009)
    •  “ Pricing Manual for the Motor Vehicle”, ACCC 2009.
    FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 21.
    • Overview
    • Changes to “Clarity in Pricing” of the Trade Practices’ Act (TPA) commence 25 May 2009
    • Rules of component pricing contained in S53C of the TPA
    • Dealers must understand their legal obligations and “comply with all the requirements of the TPA” (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    • “ Law now requires you to provide a single price that consumers need to pay to obtain a motor vehicle. This price must be stated in a prominent way.” (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 22.
    • Advertising must “prominently” show the total price of car, i.e. the total price for a consumer to drive away with that car.
    • Component pricing can still be used, but the total price has to be stated and be just as prominent and clear as the component price.
    • “ A prominent single price is one that:
      • Stands out so that it is easily seen by a consumer
      • Is clear, eye-catching and very noticeable”
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 23.
    • “ To ensure that you are providing a price in a prominent way, you should check whether your advertising ... looking closely at the medium you are using. While this will vary largely on a case-by-case basis, you should consider factors such as the size, placement, colour and font of the price, as well as the background of the advertisement.”
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 24.
      • Unclear advertising under new legislation
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 25.
      • Clear advertising under new legislation
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 26.
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 27.
    • Dealer advertising
    • All quantifiable components of a vehicle must be shown as a single figure in the advertisement. This includes
      • Purchase price
      • Stamp duty
      • Compulsory third party insurance
      • Registration
      • Dealer delivery
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 28.
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 29.
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 30.
    • Disclaimers
    • Can no longer ‘hide’ total cost of car by disclaimers, such as ‘plus on-road costs’
    • For disclaimer to be effective it must be:
      • Easily seen by customers
      • Positioned closely to main price
      • Clear and not misleading
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 31. Disclaimers Print Disclaimer’s font size, shape, colour must be clearly readable in advertisement TV/Internet/Cinema (electronic visual) Per print above, disclaimer must be clearly visible. It must also remain on screen long enough for customers to read Radio (electronic audio) Must be clearly stated/said so can be heard and understood by customer ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 32.
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 33.
    • Component Pricing
    • Component pricing required in advertising :
    • Charges of any description payable to purchase the goods/service
    • Tax duty, levy or charges payable for the supply
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 34.
    • Component pricing not required in advertising :
    • Optional extras
    • Sending charges NB: ACCC’s view is that “dealer delivery” is not a delivery or sending charge
    • Components not quantifiable at the time of advertising
    • Third party paid by your business not charged to the customer
    • Duty, levy, tax and fee directly paid by customer
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 35.
    • Quantifiable component
    • An amount is quantifiable if:
      • “ At the time you are making the representation you are able to readily convert it into a dollar amount”
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 36.
    • Component Price Check List
    • Price to include all components you are able to quantify
    • If you cannot quantify a component, must be able to substantiate why
    • Where components vary or cannot be quantified at this time you must state the total as it is able to be quantified
    • Consumers must be advised of any components that vary or cannot be quantified
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 37. ACCC’s new pricing legislation
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 38.
    • Component Price Check List
    • Price to include all components you are able to quantify
    • If you cannot quantify a component, must be able to substantiate why
    • Where components vary or cannot be quantified at this time you must state the total as it is able to be quantified
    • Consumers must be advised of any components that vary or cannot be quantified
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 39.
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 40.
    • Pictorial advertising
      • “ Where this type of advertising is used, the vehicle, as depicted in the picture, must be able to be purchased by a consumer at the advertised price. You need to ensure that the model, visible accessories, any other features and advertised price corresponds with what is actually available in the dealership.”
      • (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 41.
    • Other topics discussed in the ACCC Pricing Manual for the motor vehicle industry include:
      • Discount pricing/ two price advertising
      • Cash back / rebate offers
      • Misleading/deceptive conduct
      • False/misleading representation
      • Bait advertising
      • Additional obligation – leasing, finance, credit
      • Full document is available at: www.colledges.com.au or www.accc.gov.au
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 42.
    • From the consumers’ viewpoint
      • Will have accurate information
      • Will know the total minimum cost to purchase
      • All taxes, duties and fees included in price
      • Even ‘playing field’ for comparing prices between dealerships
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 43.
    • From the Automotive Industry viewpoint
    • Federal Chamber of Automotive Industries (FCAI) and car companies concerns:
      • Industry’s need for promotions to move stock
      • Legislation is “too complex” and may lead to different interpretations
      • How can prices align when components/’on road’ costs vary?
            • Car registrations vary from state to state
            • Third Party Insurance varies dependent on person’s driving history
            • Delivery costs
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 44.
    • From the Automotive Industry viewpoint (cont)
        • Will decrease competition
    • Want clarity in new legislation
    • Current advertising consists of the price of a standard model. Does not include dealer delivery, stamp duty, registration fees, etc.
    ACCC’s new pricing legislation FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 45. Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 46.
    • Legislation passed in the Senate on 14 May 2009
    • Awaiting Royal Assent (as at date of presentation, passed on 22 May 2009)
    • Outcomes from the consultation completed
    • Two main amendments
      • Contracts before 12 December may still be eligible
      • Combine the value of batches of substantially identical assets
    Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 47. Contract periods Stimulus Package – Business Contracts entered by* 30 June 2009 31 Dec 2009 Assets installed by 30 June 2009 30 June 2010 31 December 2010 30% in 2008-9 30% in 2009-10 10% in 2010-11 10% in 2009-10 10% in 2010-11 FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 48. Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 49.
    • Applicable to new assets that are:
      • Purchased and ready for use in Australia between 12 December 2008 and 31 December 2009
      • Tangible
      • Depreciating assets with depreciation deduction under Division 40 ITAA
    Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 50.
    • New assets that are not eligible
      • Intangible assets, including software
      • Cars using the cent per kilometre method
      • Land, Buildings and Trading Stock
      • Capital Works – buildings, construction and earthworks
      • Water Facilities
    • Second-hand assets are excluded
    Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 51.
    • Small businesses over $1,000 per individual asset
    • Other businesses over $10,000 per individual asset
      • Definition:
        • Small business – Less than $2M
        • All others – Greater than $2M
    • Not reduced for any non-taxable use
    • Combine the value of batches of substantially identical assets
    Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 52.
      • Combine the value of batches of substantially identical assets.
      • Example 1 : Landscaper purchases from the same supplier a mower, brush cutter and leaf blower. These are not a set and, therefore, are not eligible.
      • Example 2 : Same landscaper purchases a computer and multi-function photocopier. These items cannot be grouped even though they are used in the same setting, and are, therefore, not eligible.
      • Example 3 : A courier purchases a two-way, radio base station and handsets. These are a set as they are intended to work together and are eligible.
    Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 53. Stimulus Package – Business
    • Possible to claim the tax break over two (2) years
    • An amount can be recognised as new investment in more than one (1) year
    • Provided the investment allowance has not been previously claimed
    • Allows for new investment amounts below the threshold be carried over
    FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 54. Stimulus Package – Business
    • How to claim the tax break:
    • You purchased an asset on 30 June 2009 below the threshold, for $9,000
      • Upgraded the asset on 31 July for $1,200
      • Claim 10% investment allowance on $10,200 in 2009-10
    FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 55. Stimulus Package – Business
    • It is possible to claim the tax break over 2 years
    • Once the investment allowance has been claimed
    • It can still be used towards meeting the threshold in subsequent years
    • Carried over for threshold purposes, but not claimed again
    FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 56. Stimulus Package – Business
    • How to claim the tax break (cont)
    • Purchased an asset on 30 June for $10,000
      • Claimed 30% investment allowance on $10,000 in 2008-9
      • Upgraded the asset on 31 July for $1,200
      • Claim further 10% investment allowance on $1,200 in 2009-10
    FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 57.
    • Assets held under Leases
    • Investment allowance claimed by the entity that is entitled to claim the capital allowance deduction
    • Can be factored into the lease price
    • A lessee may hold an eligible asset if they have the option to become the legal owner at the end of the lease
    • Therefore, the lessee can claim the investment allowance
    Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 58.
    • Motor vehicles
    • Cars qualify if they are new and eligible for a tax deduction under Division 40
    • Demo can be new or second-hand:
      • A demo can qualify for new assets provided they have only been used for ‘reasonable testing and trialling’ (in the hands of the purchaser)
      • A demo used for driving to and from the dealership by the DP does not qualify for ‘reasonable testing and trialling’
    Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 59.
    • Eligible for Tax Break (cars)
    • Taxpayers using one third of actual expenses and log book method
      • Claim a deduction under Section 40
    • Taxpayers claiming ‘12% of original value’ method can claim a depreciation deduction (they will not be excluded)
    • Taxpayers claiming ‘cents per kilometre’ cannot claim tax break
    • Car limit applies – currently $57,180, therefore $17,154 tax break
    Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 60.
    • Other considerations
    • If the asset is subsequently sold, the tax break is still available provided it was installed and ready for use by the deadline.
    • The taxpayer can carry forward tax losses to future periods (disallowed under the previous investment allowance schemes).
    Stimulus Package – Business FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM
  • 61. Stimulus Package – Business
    • Marketing possibilities
    • Direct marketing to the customer
    • Press and retail advertising
    • Update sales people on the provisions
    • Lease arrangements
    FOR ACCOUNTANTS, BY ACCOUNTANTS COLLEDGE’S AUTOMOTIVE ACCOUNTANTS NETWORK FORUM