Don't miss your opportunity to take advantage of the $150,000 instant asset tax write off, now extended until the end of 2020 for a new commercial vehicle.
If you haven’t already looked into the benefits of the instant tax asset write off for your business now is the time. By taking advantage of the stimulus package introduced by the Scott Morrison government you could acquire new business assets, including vehicles, from your tax alone. Previously estimated to end June 30, Josh Frydonburg on the 9th of June announced the instant write off has now been extended through to the end of 2020.
“Our targeted stimulus package will focus on keeping Australians in jobs and keeping businesses in business so we can bounce back strongly,” prime minister Scott Morrison explained.
Formerly introduced for businesses turning over $50 million or less a year, the threshold for businesses to take advantage of the stimulus has now been increased up to $500 million a year in order to take advantage.
“The $150,000 instant write-off decreases your payable tax on business-related purchases and is a temporary increase expected to last until June 30th, 2020,” explains Booth’s motor group.
This means you can spend up to $150,000 on assets, enabling your taxable income to be reduced by the same amount! The threshold is calculated per asset valued under $150,000 making it possible to instantly write off multiple assets.”
Eligible for both new and used vehicles, if you are looking to purchase a vehicle solely to assist your business, or at least over 80% of the vehicle's use for business purposes, you will be qualified to receive all or a large majority of it back as an asset write off as a business tax deduction.
Booth’s Motor Group does describe it as “the ultimate business tax deduction for buying a car”.
The percentage the vehicle is used will determine the amount of tax you will be able to get back. For example, if you are looking to buy a car for $90,000 but you are only intending to use the car 90% of the time for business purposes you will be eligible to write off $81,000.
For vehicles like one-tonne utes, vehicle owners are able to claim the entire purchase value on the vehicle.
However, if the vehicle exceeds $150,000 it is then deemed ineligible for the tax write off.
Caradvice lists each use case in their article “Instant Asset Write Off 2020”
Yes, any financed vehicle is still eligible for the instant asset write off. Brokers have now been given access to accelerated lending processed and fast-tracked funding so those looking for a commercial vehicle will have access to them faster.
Previously individuals needed to have physically received the vehicle prior to June 30 for the cut-off, however, with the extension, this will only be relevant to claim back for this financial year.
Talk to CarClarity today to understand your best options for new commercial vehicle financing.