Last Chance to Access the Instant Asset Write-Off Scheme at $150K

On May 9, the Australian Government announced its budget for the 2023-24 financial year. 

There was some good, particularly the government’s ability to bring us into a surplus for the first time in 15 years, and some not so good (to put it delicately) – particularly when it comes to the Instant Asset Write-Off Scheme.

You see, as part of the measures introduced for small business, a temporary $20,000 threshold for the small business instant asset write-off scheme will apply for one year, following the end of the temporary full expensing rules. 

In plain English, what does this mean for you?

Well, under the current scheme, small businesses (like trades) can claim an instant asset write-off of up to $150,000, which can be used on large items like a 4x4 ute used for work. 

And, since the threshold can be applied to each individual asset, the business can have accessories such as canopies, trays and drawers instantly deducted from their taxable income come the end of the financial year.

Under the coming changes, however, small businesses and employees will now only be able to claim up to $20,000, and the annual turnover figures have reduced as well from under $500M in annual turnover to less than $10M to qualify.

The good news though, this won’t come into effect until July 1st, 2023.

But it does mean that 2022-23 could be the last year you can access the instant asset write-off scheme at $150,000. 

So, if you’re planning on upgrading your 4x4 with all the accessories needed to get the job done, now is the time to do it!

How do I take advantage of the Instant Asset Write-Off Scheme?

To qualify for the instant asset write-off scheme, your eligibility depends on a range of factors:

• Your aggregated turnover (the income of associated businesses is lumped together with the total ordinary income of your business) must be less than $500M.
• The date you purchased the asset must be before July 1^st, 2023, and the asset (the vehicle or accessory) was first used or installed ready for use before this date.
• The cost of each asset must be less than $150,000.
• If purchasing a new 4x4 ute, the ute itself must be able to carry more than 1000kg, or 9 passengers, to be eligible up to a maximum claim price of $150,000. 
• If it cannot carry more than 1000kg or fewer than 9 passengers, it is defined as a car (not a ute) and is subject to the threshold amount of $64,741.
• You can only apply for the scheme for a commercial (work) vehicle. 
• For example, if you purchased a new 4x4 ute and added the necessary accessories such as a ute tray or canopy, for $110,078, and 100% of the time used this vehicle for work purposes, you can claim 100% of the cost.
• If, however, this was more of a 75/25 split of the time used for work purposes and recreational use, then you can only claim 75% of the total cost – $82558.5 to be exact.

With this in mind, there’s never been a better time to upgrade your fleet or private work vehicle with a new ute that’s 4x4 Equipped thanks to TJM. 

So, what are you waiting for? Take the Lead before July 1st! 

Head over to our website now, start building your dream 4x4, and then Request a Quote instantly from your local TJM store to take advantage of the instant asset write-off threshold – before it’s too late.

To find out if you’re eligible for the instant asset write-off scheme for the 2022-23 financial year, and to receive guidance on the financial benefit your business will receive from the scheme, please consult with your accountant before purchasing any assets for work purposes. 

You can also read more about the scheme on the ATO website here.

Please note that this information should not be intended as tax advice. Always consult your accountant, tax advisor, or the ATO for more information, and ensure your eligibility before making a purchase.