Accelerated depreciation of motor vehicles (instant asset write-off) has been increased from $20,000 to $30,000. This incentive has been extended to 30th June 2020 and now offered to medium-sized businesses.
What is Accelerated Depreciation?
Small and medium business will be able to claim an immediate deduction for assets, including new and used motor vehicles, where the cost is less than $30,000 ($33,000 Including GST) subject to business use.
Generally, a medium business is one with an aggregated turnover of less than $50 million in the 2018-19 financial year. You should check your eligibility with your accountant as this threshold has just increased to $50 million.
So, what is it?
Obviously its more complicated than the government handing our $30,000 tax returns for FREE. This form of accelerated depreciation allows you to reduce your taxable income by $30,000, resulting in a cash flow benefit relative to the rate you’re taxed at.
Accounting firm BDO use the example of a small business registered for GST, purchasing a new or used car with a GST-inclusive value of $32,999 ($29,999 ex GST). Purchased between 2nd April 2019 and 30th June 2020 and used 100% in business. In this example the business would be entitled to an immediate deduction of $29,999 and also able to claim a GST input credit of $2,999. No further depreciation available over the life of the vehicle.
Buying a Car?
If you need a business vehicle, Llewellyn Motors has a dedicated team across all our franchises who can help you with a solution to get you on the road with CONFIDENCE!
Contact us today (07) 3282 2922