Changes to Temporary Full Expensing 2023
Changes to Temporary Full Expensing 2023 That Will Affect Your Business
Big change coming to the temporary full expensing scheme – and soon. It’s not as complicated as some, but it can trip you up and cost money if you’re not aware and ready to take appropriate action. We’ve prepared a rundown of the changes to temporary full expensing 2023 and how these changes can affect your business.
At FinanceBeagle, we stay on top of developments like this that can affect your planning. We’re a car loan broker and asset finance broker. Financing loans through our lenders is our business and making sure our customers are up to date on relevant tax code information is part of our service.
Let us show what we can do for you. It’s easy to get in touch – call us on 1300 225 525 or request a quote online. Complete our online form. You’ll get quick answers and a great rate.
Temporary Full Expensing 2023 Ending Soon
Business purchases that are eligible for the temporary full expensing scheme must be made by 30 June 2023 in order to qualify. After that date, the write-off will once again be under instant asset write-off rules, which have a threshold limit, currently set at $150,000. The threshold is slated to be reduced back to a much lower level, as existed in the past – details are not yet finalised, but there will be a significant reduction.
How This May Affect You
If you’re in the market for capital purchases, be aware that the global supply chain slowdown may impact availability and create delays for items you want to buy. Initiate your purchases before the 30 June 2023 deadline to take advantage of temporary full expensing rules and the unlimited threshold.
Motor Vehicles Likely Impacted
Because auto and truck manufacturing rely extensively on parts sourced from all over the world, they are particularly at risk for unanticipated production and delivery delays due to supply chain issues. The recent and ongoing shortage of specialised microchips that has prevented completion of millions of cars and trucks is a prime example. In this type of situation, it becomes impossible to guarantee delivery dates, and dealers may even stop taking back orders. If you delay your business vehicle purchase, and one of these supply problems pops up, you may wind up missing the deadline for temporary full expensing rules.
Some History and Context
Temporary full expensing 2023 is the last extension of the temporary full expensing scheme – which is basically an expansion of instant asset write-off. To stimulate business growth during the pandemic, the Australian Taxation Office at first increased the maximum threshold limit on instant asset write-off to $150,000, where it stands today. They then substituted the temporary full expensing rules, which differ primarily in that there is no threshold limit. Right now, the Taxation Office advises that you must use only temporary full expensing until 30 June 2023, which is actually advantageous because of the unlimited threshold.
However, purchases made after 30 June 2023 will no longer be eligible, and will instead be treated as before under instant asset write-off. There are plans to reduce the current $150,000 threshold on instant asset write-off back down – possibly to $30,000, and the remaining portion of value will return to the original depreciation rate of 15%. After the current high threshold is reduced it is quite possible that many business purchases will exceed the limit. This is particularly true for vehicle purchases.
Get Started Now
The first step in a business purchase will typically be securing a loan. With the limited time still available for the unlimited threshold write-off with temporary full expensing 2023, you don’t want to be waiting around for approval.
Let FinanceBeagle Help!
FinanceBeagle moves quickly to match you with our high-quality lenders, getting your loan approved so that you have time to negotiate for your business vehicle or other assets. We do all the legwork to secure your loan, so you don’t have to. Give us a ring on 1300 225 525 for more information, or request a quote online. You can also contact us using our online form.