Temporary Full Expensing finishes 30 June 2023

One of the stimulus measures announced during Covid was temporary full expensing.

Temporary full expensing allows:

Businesses with an aggregated turnover of less than $5 billion to immediately deduct the business portion of the cost of eligible new depreciating capital assets.
Businesses with an aggregated turnover of less than $50 million, to immediately deduct the business portion of the cost of eligible second hand depreciating capital assets.

For example if you need a new computer for business you may be able claim a tax deduction of 100% of the cost of that computer in the year your bought this.

Well this temporary full expensing, finishes up on 30 June 2023.

The eligible assets must be first held, and first used or installed ready for use for a taxable purpose, by midnight on 30 June 2023. If it arrives on 1 July 2023, it is not eligible.

So if you think you may need some capital equipment replaced in the near future, and you have the funding to do so, make sure the asset is installed ready for use by midnight on 30 June 2023

Important notes

You need to check that the asset you want to claim is an eligible asset. Assets located overseas, buildings and some other assets are not eligible assets.
There may be a cap on the amount you can claim for a deduction for motor vehicles.
If you only use a portion for business, you can only claim that portion as a deduction.
If you buy a work truck for $30,000 and claim a 100% tax deduction under temporary full expensing; and you trade this in in say 4 years for a new vehicle and get a $10,000 trade-in. This $10,000 trade-in may be assessable income for you.

Make sure you talk to your tax professional to understand the best option for you.

Wayne Wanders is an experienced Business Advisor skilled in analysing business financial performance and cash flow. Wayne may also be able to assist you in preparing your grant application. Contact Wayne below for a free no obligation session.

Also, if you want some more information on grants, contact me below

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