Business owners wanting to buy a vehicle, asset or important piece of equipment and immediately write off the full cost have limited time 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It will be superseded by a much less generous scheme, known as the Instant Asset Write-Off, which in the recent budget has been increased from $1,000 to $20,000.
Although the increase can be seen as a positive, when compared to Temporary Full Expensing, the threshold is significantly smaller.
So if your business could benefit from new equipment, you may want to act quickly.
Let’s recap the Temporary Full Expensing Scheme
The Temporary Full Expensing Scheme was originally introduced as a stimulus measure during COVID-19, allowing eligible businesses to immediately write off eligible depreciating assets 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 payable for the financial year, potentially allowing businesses to reinvest funds back into growth sooner.
Let’s explore the new Instant Asset Write-Off threshold
The updated Instant Asset Write-Off Scheme offers eligible businesses with annual turnover below $10 million a $20,000 threshold.
Similar to previous schemes, eligible businesses can claim an immediate deduction for eligible purchases up to the threshold rather than depreciating them over several years.
Operating on a per-asset basis, this version of the scheme will apply from July 1, 2023 to June 30, 2024.
Need a hand with business finance?
When purchasing an asset with the intention of using tax incentives, selecting the right funding structure is just as important as selecting the right asset.
Options such as equipment finance can help businesses preserve working capital while still upgrading assets.
And that’s where we can help. We can present finance solutions tailored to your business requirements both now and into the future.
Whether you’re looking at farm equipment finance, business car loans, aviation finance or even boat loans, our asset finance brokers can help.
So if you’d like help securing finance that supports your cash flow and long-term goals, get in touch with our team.
