One month to go before generous asset write-off deadline

It’s the first day of June and that means there’s just one month to go before the current Temporary Full Expensing tax incentive expires, after the Albanese Government decided not to renew it.

Under the current scheme, businesses with annual turnover of $5 billion and under can purchase assets for business use of any value and immediately deduct the full cost of the asset in the year that it was purchased, instead of over several years. There is also no limit to how many assets you can claim.

From July 1, 2023, the asset value threshold will drop to $20,000, as announced in the 2023-24 federal budget earlier this month.

An important thing to note is that any asset purchased will need to be delivered by June 30, 2023 for it to be eligible for the Temporary Full Expensing incentive.

A car limit of $64,741 applies, so if you're purchasing a vehicle for business use that has a load capacity of less than one tonne and seats fewer than nine people, the Temporary Full Expensing incentive doesn't apply but you can claim up to the car limit.

From July 1, any asset purchased that is priced over $20,000 can still be claimed but will have to be done over several years. Business eligibility for the new instant asset write-off (IAWO) will also shrink to only include those with an annual turnover of $10 million or less.

Right now, dealers are reporting decent levels of stock in the country so it's not too late to get your shopping in and have your purchases delivered to you by end of the month.

Related: Best EOFY 2023 construction equipment deals

To be clear, it does not mean you get a full refund of the cost of your purchases, it simply means you pay less tax this financial year. In addition, only the business-related proportion of your purchases are tax deductable so if you're using your new ute for both business and personal purposes, you can only claim the business portion of your purchase.

So either get in touch with your dealer now for some last minute shopping, or look up equipment you can buy right now including excavators, loaders and more on constructionsales.com.au.

Note: These tips do not constitute tax or financial advice. Speak to a registered tax agent for advice on your specific circumstances.