The Albanese Government’s change to the instant asset write-off scheme will slam the door shut on new commercial vehicles being claimed by businesses.
Announced as part of the 2023-24 Budget, both the total cost claimable and the number of businesses eligible for the Instant Asset Write-Off are being reduced, effective from July 1.
The scheme currently allows for a piece of new equipment up to the value of $150,000 to be instantly claimed, but this is being reduced to $20,000.
The Government says up to 3.8 million small businesses with an annual turnover of less than $10 million will be eligible, and it’s pledging $290 million in cash flow support.
Presently, businesses with a turnover of up to $500 million are eligible to use the scheme, with instant write-offs available for both new and used vehicles.
Under the scheme, assets must cost less than the instant asset write-off threshold and be purchased and used in the year the write-off is claimed.
In other words, if you’re waiting on your new ute for work and delivery won’t take place until the new financial year, you won’t be able to take advantage of the current instant write-off rules.
“We are disappointed that the scheme has been cut back because it really has allowed businesses to invest in modern, safer and cleaner vehicle fleets,” said Australian Automotive Dealer Association (AADA) CEO James Voortman.
“With the current shortage of new vehicles and the associated delays, many businesses have not been able to take advantage of the instant expensing measure before it expires in less than two months time.”
“These concessions will be missed by many customers. The instant asset write-off has made vehicles more affordable, and that has helped support economic growth,” said Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber.
Separate to the revised instant asset write-off scheme, the Government is rolling out an energy incentive scheme for businesses with a turnover of up to $50 million.
It will offer an additional 20 per cent tax discount on assets and equipment that are more energy efficient or support electrification.
This is being run from July 1, 2023 to June 30, 2024 and up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.
This can’t be used towards electric vehicles, though it can be used for equipment like batteries and thermal energy storage systems.
MORE: 2023 Instant asset write off and the thresholds to claim
MORE: What the 2023-24 Federal Budget means for Australian motorists
