The instant asset write-off scheme was installed by the previous Federal Government to support Australia’s recovery from the pandemic.

The aim has been to let businesses save on tax when investing in new capital assets.

In essence it allows businesses to deduct the full cost of eligible capital assets from their profits for the year, rather than depreciating the cost over several years.

The scheme finishes on 30 June 2023 so if it is of interest, it is vital to take advantage now.

According to a tax specialist we spoke with, small businesses in particular have a lot to gain from the scheme as the measures could represent a significant opportunity to boost the year’s bottom line.

For small- and medium-sized businesses this full expensing is also available for second-hand assets.

For businesses with an annual turnover of $50 million or more, second-hand assets are excluded.

Commercial vehicles such as vans, buses and trucks that are bought and used for work purposes can be fully written-off, whatever their cost.

Crucially – for tradies, for example – some larger utes such as the D-Max are also regarded as commercial vehicles rather than cars. Basically, if the ute has a carrying capacity of over one tonne it isn’t regarded as a car and the car limit does not apply.

Car purchases are limited to $64,741. Cars over the price are regarded as luxury vehicles.

With respect to claiming the instant tax write-off, it is undertaken with lodgement of your tax return. Proof of purchase has to be submitted. We recommend speaking to an accountant for financial advice.

If you’re interested in taking advantage of the Instant Asset Write Off before it ends, call the Major Motors team on (08) 9365 6333.