EOFY and making the most of the instant asset tax write-offs
How the instant asset tax write-off could benefit your business.
As the end of another financial year approaches, businesses will be taking time to ensure their books are in order, and tax benefits are maximised.
Following on from the COVID Stimulus Measures, the Federal Government’s 2021 Budget has expanded Instant Asset Write-offs with some measures now available until 30 June 2023.
These measures have been incredibly popular with Australian businesses. A recent Commnwealth Bank survey found that 50% of surveyed companies intended to take advantage of the measures. The survey also noted that three out of four respondents from the construction sector had leveraged these tax benefits, making this sector the most active.
The 2021 Budget now allows for:
- The full expensing in the first year of use of new depreciable assets;
- The full expensing of the cost of improvements to existing eligible assets;
- The full expensing of the cost of used assets up to $150K purchased before 31 December 2020 and delivered or installed by 30 June 2021 by businesses with turnover between $50M and $500M.
According to the Australian Taxation Office (ATO), the types of assets that instant asset write offs may apply to include:
- Vehicles used to conduct business
- Types of office furniture
- Computers and technological equipment
- Mining equipment
- Certain kinds of machinery and equipment
For more information on eligibility requirements for instant asset tax write-offs, visit the ATO website or consult your tax and accounting professional.
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As the end of the financial year approaches, business owners may wish to consider how they can maximise their tax benefits. The instant asset tax write-offs and temporary full expensing measures are two key ways businesses may be able to reduce their tax bill and maintain growth.
If you wish to finance the acquisition of an asset, Earlypay has competitive equipment finance solutions that may help to preserve your cash flow while accessing your capital, so your business can continue to thrive in the next financial year.
For more information on how Earlypay can help your business with invoice financing arrangements, you can call our friendly team on 1300 760 205 or visit our sign-up form.
