A positive cash flow within your business is important to maintain healthy growth. This can be rather tricky if you need to purchase large essential assets and equipment for your business.
However, buying new or used assets for your business has never been less taxing with the Federal Government’s Economic Stimulus Packages.
If you have invested in assets for your business in the past year, the Instant Asset Write-Off may help reduce your taxable income and improve your cash flow.
The Instant Asset Write-Off Scheme is available to businesses with an aggregated turnover of up to $500 million and applies to assets up to $150,000 each in value purchased before 31 December 2020 and used or installed by 30 June 2021.
Under the Instant Asset Write-Off Scheme any assets bought (totalling up to $150,000), regardless of whether they are new or second-hand, can be written off in the same financial year following simplified depreciation.
This may apply to assets such as:
- Computer and office equipment
- Earthmoving and construction equipment
- Equipment and machinery
- Light and heavy commercial vehicles
- Manufacturing and industrial equipment
- Medical and dental equipment
Businesses can also benefit from the instant asset write-off multiple times, however, it’s important to note that if the item is also for personal use, you must apportion that amount and deduct it from your claim.
Haven’t purchased your new asset before 31 December 2020? Don’t panic, you may be able to reap the benefits of the Temporary Full Expensing Scheme.
Temporary Full Expensing was introduced in the 2020 Federal budget and applies to businesses with an aggregated turnover of up to $5 billion for new and used eligible assets of any value purchased and installed by 30 June 2022.
The scheme is essentially a greatly expanded accelerated depreciation program that allows businesses to claim a tax deduction for the full value of the purchase after its use, rather than claim depreciation amounts over several years.
These two government measures have been introduced to stimulate growth, investment and job creation within Australian Businesses.
Being able to write-off assets purchased is all well and good, but if you don’t have access to the funds to purchase them, then the scheme won’t be of much use to your business.
So, if you’ve decided to purchase a new commercial vehicle, need to upgrade your current manufacturing equipment or you have any other asset requirements and require assistance obtaining finance to make the most of the instant asset write off or temporary full expensing scheme get in touch with Morris Finance today.
Contact one of our finance specialists today on 03 5223 3453 to discuss your options!
More information can be found in the links below.