Business owners wanting to buy a vehicle, asset or important piece of equipment and immediately write off the full cost have just over a month to act.
That’s because the temporary full expensing scheme is set to expire on 30 June 2023.
It will be superseded by a much less generous scheme, known as the instant asset write-off, so if your business could do with expensive new equipment, an asset or commercial vehicle, you might want to act quick!
What is temporary full expensing?
Temporary full expensing is similar to the popular instant asset write-off scheme, but with an expanded scope.
Originally a stimulus measure to address the effects of the COVID-19 pandemic, the scheme allows businesses to make significant asset investments.
Businesses can have eligible depreciating assets immediately written off in full with no cost limit.
Yep, that’s right … no cost limit on eligible assets.
Applied for with your tax return, the scheme can reduce the amount of tax you have to pay for the financial year – which means you can reinvest the funds back into your business sooner.
Trucks, coffee machines, excavators, and vehicles are just some examples of assets eligible under the scheme.
But to take advantage of it, the asset must be installed and ready to roll by 30 June 2023.
So you’ll have to act quickly!
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.
What if I miss the deadline?
If you miss out on the 30 June 2023 deadline, or your order doesn’t arrive in time, hope may not be lost.
You may still be able to take advantage of the instant asset write-off.
This scheme will allow for eligible purchases of up to $20,000 to be written off by 30 June 2024, as recently unveiled in the 2023 Federal Budget.
However, as you might have noted, the available write-off amount is significantly lower than the temporary full expensing scheme that’s coming to an end.
Need a hand with a business loan?
When purchasing an asset with the intention of using this scheme, it’s crucial to select a finance option that’s suitable for your business.
And that’s where we can help out. We can present you with financing options that are well-suited to your business’s needs now, and into the future.
So if you’d like help obtaining finance that’s gentle on your cash flow, and helps you achieve your long-term goals, please get in touch ASAP so we can help you beat the EOFY deadline.
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.