Castle Hill Bookkeeping and the 2009 Federal Budget

The 2009 Federal Budget has been approved and delivered. Since we are a small business ourselves, we wanted to take a look at how the 2009 budget would affect our bookkeeping service in Castle Hill.  There has been some debate as to whether or not this budget has helped small businesses, especially during these tumultuous economic times we are experiencing, and whether there should have been more focus on helping to improve cash flow and retaining current staff.

A key area that the budget has helped small businesses is by increasing the Small Business and General Business Tax Break from 30 percent up to 50 percent. This tax break applies to new capital items costing over $1000 that are installed and ready for use by the end of 2010.  A good example of this is that if you are a small business owner in say Castle Hill, Baulkham Hills or Norwest with a turnover of two million dollars or less and you buy a company car for $20,000, you will get a tax deduction of 50 percent ($10,000). Since we are bookkeepers, this is an optimal time to buy office equipment such as computers, software, scanners, etc.

The government has worked hard to help small businesses with the Small Business Support Line and has allocated ten million dollars to be spent over the next two years on it. We see this as a very good thing. Managing finances and paperwork of a small business can be very stressful. The advice line will be there to offer advice on finances, how to manage cash flow, and even personal stress. This is a great option to have during the current financial crisis.

To go with the good news is always a little bad, however.  Starting on July 1 2009, the yearly cap on contributions to superannuation at the concessional tax rate will be reduced by half. This will mean that instead of $50,000, it will be $25,000 and for those 50 and over, it will drop from $100,000 to $50,000.

The end of the financial year is coming up fast so make sure you address any personal and business finance adjustments based on the 2009 budget shortly.