Is your business eligible for the current government tax incentives?

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 a new or used truck 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, and if you are considering making a purchase in the future, you may be able to reap the benefits of the Temporary Full Expensing Scheme.

These two government measures have been introduced to stimulate growth, investment and job creation within Australian Businesses.

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.

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.

Under the Instant Asset Write-Off Scheme any assets bought (totaling 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:

• Light and heavy commercial vehicles
• Equipment and machinery
• Earthmoving and construction equipment
• Business vehicles
• Manufacturing and industrial 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.

The temporary full expensing plan will apply to new depreciable assets and the cost of improvements to existing eligible assets, allowing businesses to claim an immediate deduction of the full value of all new, eligible, depreciable assets of any value that are first used or installed before June 30, 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.

Case Study: Greg owns a transport company, Greg’s Transport Pty Ltd, which has an aggregated annual turnover of $20 million for the 2021-22 income year.

Greg’s Transport Pty Ltd purchases a second-hand Kenworth Prime Mover for $150,000 exclusive of GST on 1 July 2021.

Under temporary full expensing, Greg’s Transport Pty Ltd will be able to claim a deduction of $150,000 for the full cost of the Prime Mover in 2021–22.

Paying less tax will improve the company’s cash flow and help Greg reinvest and grow his business.

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.

Morris Finance are one of Australia’s leading national finance companies, providing asset finance, investment, leasing and insurance services to ABN Holders; Registered Companies; Individuals and Sole Traders, and are the proud Promotional Partner of this year’s Brisbane Truck Show.

We are an Australian owned business with over 22 years industry experience and a proven track record in asset and equipment finance comprising of a passionate team of experienced professionals.  

So, if you’ve decided to purchase a new truck, or need to upgrade your current equipment 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.

Simply call 1300 4 Morris and speak to one of our Finance Specialists or email info@morrisfinance.com.au, and the team will be able to assist you in finding the best facility for your needs and budget.