“We will supercharge the instant asset write off so businesses can immediately make new purchases of up to $150,000 and reap the rewards ” – Prime Minister Scott Morrison.

The federal government recently announced a new and improved instant asset write-off initiative due to the economic impact of the Coronavirus. It’s bigger and better than last financial year and now is the time to take advantage of it!

What Is The Instant Asset Write Off?

The instant asset write-off is a deduction that small and medium businesses can use to instantly write off assets purchased up to a set value.

This means, that instead of the asset depreciating over time and claiming a portion of the original expense over multiple years, businesses can now claim the entire expense in the financial year the asset was purchased.

What Has Changed?

The government has introduced two main changes to the instant asset write-off conditions in order to boost and stimulate the economy.

1. Eligible businesses must not have an annual turnover of over $500 million. Previously the instant asset write-off was only available to businesses with a turnover of up to $50 million.
2. Assets valued up to $150,000 (ex GST) can now be depreciated instantly under the new scheme. Previously the value of the asset could not be over $30,000.

If you are a small or medium business, you can claim an instant write-off for any single business asset less than $150,000 (ex GST) and this applied on a per asset basis, so eligible businesses can instantly write-off multiple assets. The purchases must be made between 12^th of March 2020 and 30^th June 2020. The threshold applies to both new and used business equipment, which means as you claim the whole expense that financial year, thus lowering your taxable income. WIN WIN!

What Assets Can Be Written Off?

Any business asset worth less than $150k, including:

• Vehicles such as cars, vans and trucks
• Farm equipment
• Heavy machinery
• Tools
• Computers, electronics and phones
• Much more! If it’s predominately for business use, it can be written off.

Contact Us For Finance

Here are On Road Finance, we have access to over 30 credit providers and although rules and guidelines have changed over the past few weeks, our team of finance brokers are confident we can still assist you with your business needs.

$150k is a large investment from a cash flow point of view, so why not let On Road Finance do all the legwork for your business so you can take advantage of this great initiative.

To apply for a commercial loan today, please submit an online finance application or contact our team of brokers on 1300 518 580.

An important step in building a successful business is ensuring you have the right tools and equipment to support your day to day operations. Whether you’re setting up a new business venture or growing an existing business, getting the foundations right is of extreme importance.

From the 2nd of April 2019, the instant asset write-off threshold was increased to $30,000 by the Australian government. It was increased from $20,000 and the change will apply until the 30th of June 2020.

Your business may experience challenges in managing cash flow when upgrading or replacing a depreciable business asset, which is why it’s important to understand the impact of this $30,000 small business stimulus package for business vehicles, plant and equipment purchases.

Small and medium businesses may be eligible to claim an immediate tax deduction on certain assets costing less than $30,000 each. If it’s time to upgrade your existing business vehicle, plant or equipment, you may be eligible for an upfront 100% tax deduction.

Are you eligible?

As of today, to be eligible for the small business stimulus package, your business must meet the following requirements:

• Must have an active ABN
• Your business must be earning an aggregated annual turnover of less than $50 million.

What type of asset can you purchase?

Vehicles and equipment, both new and used, which are purchased for commercial purposes costing less than $30,000 are eligible for the instant asset write-off.

What if the asset is OVER $30,000?

According to the Australian Taxation Office, if you are planning to purchase a vehicle for your business over the $30,000 threshold,  expenses may still be deducted via:

• Cents per Kilometre
  The mileage rate changes every year, though you may be able to claim 66c for every kilometre your car is driven for commercial and businesses purposes, capped at a maximum of 5,000 business kilometres per car.
• Depreciation
  Over time the vehicle you purchase will depreciate in value, like any other vehicle. So, the benefit of having a business car means that you can claim some of the loss in value. Assets that cost $30,000 or more (which cannot be immediately deducted under other provisions) may be deductible over time using the general small business pool.
• Business operating costs
  If your vehicle is used for business and commercial purposes, then you may be able to claim the cost of petrol, servicing or repairs, insurance and even interest on your car loan.
• Leasing costs
  If your business is leasing your vehicle, the lease payments may be deductible to your business for income tax purposes.

Does the Small Business Stimulus apply to vehicles or equipment under finance?

Yes! If the business vehicle and/or equipment is purchased through a commercial loan, the instant asset write-off still applies. It’s a great time to apply for a commercial loan to take advantage of the Small Business Tax Break. According to the ATO, the $30,000 threshold will only remain until the 30th of June 2020 and will revert back to $1,000 from the 1st of July 2020.

How to get started

On Road Finance offers a range of finance solutions that can be tailor made to suit your business. You can purchase the asset you need, when you need it, and let our brokers handle the finance for you.

On Road Finance can offer Chattel Mortgages, Hire Purchases, Novated Leases and Low Doc Loans for your business.

Cars, buses, trucks, trailers, excavators, mowers, printing equipment, medical and dental equipment, dynamometers, sheds, cool rooms, spray booths, GPS equipment and more! If it’s used for business purposes, On Road Finance can finance it!

Apply online for a commercial loan approval and let On Road Finance grow your business today!