As we approach June 30, businesses should be mindful of the temporary full expensing scheme that the federal government is offering this financial year. Those in need of a new vehicle or equipment for their small business could benefit greatly from taking advantage of this scheme before it expires.
Temporary full expensing is an expansion of the instant asset write-off scheme. This allows businesses to immediately deduct the cost of eligible assets in the year they are first installed or commissioned.
This means, the full value of any eligible depreciable asset purchased can be immediately written off by businesses keen on investing in their future, which helps with cash flow by allowing for reinvestment back into the business sooner.
Some of the items claimable under the temporary full expensing include
- Trucks
- Cars / Utes
- coffee machines
- industrial equipment
- excavators, and
- vehicles
There is just one small catch…
…The asset must be installed and ready to use by June 30 in order to claim the benefits in this year’s tax!
But rest assured that even if you do order the asset, and then miss the June 30 deadline because it doesn’t arrive in time, you can still write it off next financial year because the scheme is set to run until 30 June 2023.
Are you eligible got temporary full expensing?
To be eligible for temporary full expensing, the depreciating asset you purchase for your business must be:
- new or second-hand (if it’s a second-hand asset, your aggregated turnover must be below $50 million);
- first held by you at or after 7.30pm AEDT on 6 October 2020;
- first used, or installed ready for use, by you for a taxable purpose (such as a business purpose) by 30 June 2023; and
- used principally in Australia.
Finding finance options that are right for your business to take advantage of the tax deduction
Although the ability to write off assets immediately is advantageous, it will not be beneficial if the necessary finances are not available to make the purchase this financial year.
If you would like assistance with obtaining financing to take advantage of temporary full expensing before the impending end-of-year deadline, please do not hesitate to contact us today. We can help you find financing options that are ideal for your business’s current and future needs.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
