Dental Practices – Invest in New Equipment for Tax Benefits

An Australian Government Budget 2017 proposal is bound to bring cheer to dental practices across the country. Now, they can upgrade existing equipment to the extent of $20,000 and get immediate tax benefits through depreciation relief.

The scheme for accelerated depreciation arrangement was first formulated in 2015 and was allowed to business having a turnover of up to $2million annually. However, this threshold was increased to $10 million in March 2017 when the Senate approved the first tranche of the Federal Government’s company tax cut plans.

The net result is that businesses with a turnover of less than $10 million annually can purchase assets to the tune of $20,000 and immediately claim that amount as a tax deduction provided the assets are installed and ready for use by June 30, 2018.

However, it is a onetime measure. From July 1, 2018, this enhanced immediate deduction benefit will no longer be available and the limit will revert back to the old level of $1,000.

This has come as a huge relief to businesses as it has been one of their long pending demands. Industries cutting across sectors have welcomed this move and have advised their units to take advantage of this scheme within the current financial year for which it is applicable.

One of the first sectors to get off the block in this regard is the Australian Dental Industry Association (ADIA). It has counselled all dental practices in Australia to make investments in new dental and oral health care equipment to the extent of $520,000 to get benefits from the Government’s recently announced tax concessions.

By doing so, dental practices tend to gain considerably.

It is an ideal opportunity to update existing equipment and buy ones that are run on the latest state of the art technologies. Thus the quality of dental care will get a boost. Those who have completed their dental technology courses in Australia lately stand to gain a lot too. Dental technicians are responsible for construction and repairs of dentures and other orthodontic appliances including crowns, bridges, partial dentures, pre- and post-oral and maxillofacial surgical devices. All this requires substantial investments in expensive dental equipment which dental technicians can do now and write it off fully as depreciation immediately.

AIDA CEO Troy Williams is especially upbeat on this score. He said, “ADIA encouraged the Australian Government to extend the life of this important tax concession beyond 30 June 2017, and it’s pleasing that this has occurred. Dental practices nationwide can now plan for their investment in new equipment during the coming financial year. When introduced in 2015, these accelerated depreciation arrangements were initially made available to businesses turning over up to $2 million annually. ADIA was pleased to see this threshold increase to $10 million when the Senate approved the first phase of the federal government’s company tax cut plans in March 2017.”

For assets valued above $20,000, the existing rules remain in place and they can continue to be placed in the small business simplified depreciation pool and be accounted for at 15% in the first accounting year and 30% in subsequent years.