Seize the day! Why NOW is the perfect time to open your Studio Pilates location
It might seem surprising but, despite the uncertainties and difficulties of 2020, there has never been a more favourable economic climate in which to open your Studio Pilates location.
Not only have studios seen record numbers of visits when reopening post-lockdowns, but the Government has now stepped in with a range of business tax incentives, making it an even sweeter deal for new, or expanding, Studio Pilates franchisees.
The measures of most relevance to our franchisee family are the enhanced instant asset write off and temporary full expensing. Effectively, these combined measures mean that franchise businesses that make new investments will be able to write off the entire cost of eligible assets in one year, rather than having the asset depreciate over several years.
The government had already increased the instant asset write off threshold from AUD30,000 to AUD150,000 in the March budget. Now, the latest budget removes any write-off thresholds and allows for the full expensing of new depreciable assets in the first year of use, as well as any cost of improvements to existing eligible assets, as long as they’re purchased from 6 October 2020 and first used or installed by 30 June 2022. Businesses will also be able to fully deduct the cost of any improvements made to existing assets.
Asset purchases could include: reformers, computers, TVs and other audiovisual equipment, even chandeliers and more - basically anything needed to help you run your new studio. The effect of this will be to provide you with higher tax deductions, reducing your overall income tax bill. And who doesn’t want that?!
Other changes include easing of the responsible lending laws to make the credit application process easier and improve small business access to affordable bank loans to fund business recovery and growth activity in a post COVID-19 environment.
These temporary tax incentives aim to encourage businesses to invest, by bringing down the after-tax cost of assets, to give a significant cash flow benefit. They’re also aimed at encouraging businesses to bring forward investment before the measure expires.
Make sure that you talk to your accountant or financial advisor for detailed advice on how you can benefit from the changes for your franchise investment.
But don’t hang around, these business tax incentives are only temporary, so best to grab ‘em while you can!
