For several years, the Australian Government has offered the Instant Asset Write-Off scheme that allows businesses to claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use. Following the numerous COVID-19 outbreaks experienced over the past year across the country, changes have been made to the scheme to extend eligibility to more businesses, increase the threshold amount for assets and introduce Temporary Full Expensing.
Without these schemes, businesses would only be able to claim depreciation on any assets purchased. That is, the reduction in value of the asset over its life span. Under that system, it may take many years before a business can recoup the full cost of any equipment purchased and installed.
The changes to thresholds result in more businesses and assets being eligible for the Instant Asset Write-Off and Temporary Full Expensing to immediately claim the business portion of the cost of new and second-hand equipment purchased and installed on their next tax returns. Therefore, many workshop owners who purchase and install equipment in the lead up to the end of the financial year, will not be left out of pocket for long with their expenses being reimbursed as a tax deduction.
In terms of the maximum value of equipment that can be claimed by a business, this largely depends on when the item was purchased and first used or installed.
This taxation deduction has proven to be a tremendous opportunity over the past few years to purchase new hoists, spray booths, wheel balancers, diagnostic scan tools, solar panels and other workshop equipment needed to stay competitive and to ensure business growth.
Of course, not every business has thousands of dollars lying around that can be easily diverted from paying wages and other regular expenses to invest in new equipment.
To help Members take advantage of the incentives available and to help grow their businesses, Capricorn Finance may be available.
Many Capricorn Members have been pre-approved for loans up to $30,000 to fast track the application process, making it easier for them to purchase new equipment before the end of the financial year.
In relation to the taxation incentives currently available and referred to in this article, there are eligibility criteria in relation to business turnover and asset value as well as exclusions and limitations in place on certain items, including a maximum value for passenger vehicles purchased. It is important for Capricorn Members to seek the advice of their taxation accountant to check whether their businesses are eligible for any of the incentives that are currently in place.
For more information on Temporary Full Expensing or the Instant Asset Write-Off please refer to the Australian Tax Office website ato.gov.au
Capricorn Members can find out more about the Finance available to them by visiting Capricorn online at www.capricorn.coop/eofy.
For further information contact email@example.com – 1800 327 437