Boost Your Business This Financial Year

On the 30th of June, the 2023-2024 financial year will reach its conclusion and Australians will wrap up their financial books, lodge their tax returns and start planning for the next financial year. If you’re running a small to medium business, now is the time to start looking at which tax deductions and concessions you can claim, and how you can grow your business.

Look at whether you can write off any assets instantly.

If you’ve invested in assets for your business, this is a great opportunity to have some big purchases from this financial year (1st July 2023- 30th June 2024) written off. The Instant Asset Write-off scheme is allowing small businesses with an aggregated turnover under $10 million to immediately deduct the full cost of eligible assets costing less than $20,000, such as tools, vehicles and other equipment, that are first used or installed ready for use between 1 July 2023 and 30 June 20241.

The threshold applies per asset, meaning if a small business has purchased several eligible assets, it may be able to deduct the full amount for each asset. The hope is that the instant asset write-off scheme will “improve cash flow and reduce compliance for small businesses”.

Terms and conditions apply, so business owners who want to take advantage of the Instant Asset Write-Off Scheme should speak to an accountant or tax specialist for more information.

Look Into Borrowing Funds for Equipment

With the end of the financial year fast approaching, you may also like to consider investing in any new equipment your business needs ASAP. However, it’s important to avoid making purchases that will put you or your business under financial pressure, and bear in mind that potential tax savings on these items will likely depend on the type of loan you take out.

  • Chattel Mortgage – With a chattel mortgage, you own the asset from the outset, then pay back the value you owe, including interest. By opting for a chattel mortgage to purchase an asset, you could potentially take advantage of the instant asset write-off before EOFY, meaning you can repay the loan quickly and avoid high-interest repayments. You may also be able to claim the interest payments on your chattel mortgage as a tax deduction. If you are eligible, you can claim the interest charges on your next annual tax return.
  • Commercial Hire Purchase – With a commercial hire purchase, you own the equipment at the time of your final repayment. If your business uses the asset to generate income, you may be able to claim a GST credit for any GST included in the purchase price of the item.

Consider what else you can claim.

Don’t forget that you may be able to claim work-from-home expenses if you occasionally work outside of the office. These can consist of registered uniforms, first aid courses, phone, data and internet expenses, and relevant skill-building courses and seminars. However, you won’t be able to claim home office expenses such as coffee and toilet paper.

Business maintenance and repairs can also typically be claimed on tax. keep in mind, this law has not yet come in to play, and there could amendments made3. We recommend reaching out to a tax specialist for professional taxation advice.

However, when it comes to choosing the right equipment loan for your business needs, you can reach out to your local MoneyQuest finance specialist. Our team can assist you with finding the right lender for your asset finance needs, so you can focus on growing your business.

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Disclaimer:

This article is written to provide a summary and general overview of the subject matter covered for your information only. Every effort has been made to ensure the information in the article is current, accurate and reliable. This article has been prepared without taking into account your objectives, personal circumstances, financial situation or needs. You should consider whether it is appropriate for your circumstances. You should seek your own independent legal, financial and taxation advice before acting or relying on any of the content contained in the articles and review any relevant Product Disclosure Statement (PDS), Terms and Conditions (T&C) or Financial Services Guide (FSG).

Please consult your financial advisor, solicitor or accountant before acting on information contained in this publication.