Currently, your business is eligible to claim an outright deduction for the cost and installation of new and second-hand assets. The outright deduction is known as temporary full expensing.<\/p>\n
Under the legislation enacted by the federal government, a business must hold and use a business asset before 30 June 2023 to qualify for temporary full expensing.<\/p>\n
As your business is below the turnover limit of $50 million, you will qualify for temporary full expensing for both new and second-hand assets. This means that, unlike previous rules on instant asset write-offs, no limit applies to the cost of an asset under the temporary full expensing rules.<\/p>\n
What the rules mean for your business<\/strong><\/p>\n Any eligible new or second-hand assets purchased this year will be immediately written-off. Also, if you are using a small business depreciation pool for depreciation, the entire balance will also be written-off. Unfortunately, small businesses cannot \u201copt out\u201d of the full expensing rules if you do not apply for an exemption before your tax return lodgement.<\/p>\n This large deduction may not be something you want to claim all at once and would rather smooth out over a number of years. Options available to you in this situation include leasing assets, rather than purchasing them, over the next couple of years.<\/p>\n Alternatively, we may reduce your income tax instalments accordingly so that you can adequately account for cash flow over the year.<\/p>\n Please contact us if you wish to discuss this further, including other options available for your business this year.<\/p>\n <\/p>\n Sources:<\/p>\n