By Phil Ringuet
Small business owners wanting to buy a vehicle, asset or important piece of equipment and immediately write off the cost have just over a month to act this financial year.
There’s nothing like an impending deadline to get you moving.
And with June 30 now just over a month away (didn’t that sneak up on us!), time is running out for your business to take advantage of the federal government’s temporary full expensing scheme this financial year.
What is temporary full expensing?
Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.
It allows businesses that are keen to invest in their future to immediately write off the full value of any eligible depreciable asset purchased, at any cost.
This helps with your cash flow as it allows you to reinvest funds back into your business sooner.
Trucks, coffee machines, excavators, and vehicles are just some examples of assets eligible under the scheme.
There is just one small catch though …
The asset must be installed and ready to use by June 30 in order to be eligible for this financial year.
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.
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.
Obtaining finance that’s right for your business
Being able to immediately write off assets is one thing, but if you don’t have access to the right kind of finance to purchase them now, the scheme won’t be much use to you this financial year.