As the financial year comes close to closing, and the budget is announced, we always have our ear out for the updates on the asset write-off. For the last few years there have been marginal changes, but this year is a biggun. As at 1 July 2023, the asset write off limit will be significantly reduced, which means there is a small window of time remaining to take advantage of the much higher amount that was offered over the current financial year. Here are how the changes can affect you, and what you need to know before the deadline arrives.
What is the asset write-off limit reduction?
The current instant asset write-off for businesses and individuals has allowed deductions of up to $150,000, however this will expire on 30 June 2023. From then, the new write-off will be reduced to $20,000. This is a huge difference, especially if the write off is used for high investment assets such as work or onsite vehicles, including Can Ams. This spending threshold is a big hit to plans for many who use it for the vehicles that will take them through the year, improving productivity and efficiency significantly. With that, we’re expecting a bit of a race to beat the finish line and make the most of it before the game it’s too late.
Possible implications for you
The reduction in the asset write-off limit poses a challenge for project owners, tradies and small businesses. Previously, the tax deduction was applicable to work vehicles with a cost exceeding $20,000, so businesses could make significant investments such as UTVs, with very little out of the pocket expense. However, under the new budget, vehicles exceeding the $20,000 threshold will require the tax deduction to be spread over three financial years (yeah, yikes), rather than one. This change can impact cash flow and may influence decision-making when it comes to purchasing higher-priced assets.
Timeframe and supply challenges
With the deadline set for June 30, 2023, you might be feeling a bit under pressure to purchase before the current tax break comes to an end, and for good reason! However, we’re also going to see a lot of stock shortages and production slowdowns in the industry. Sutto’s have made concerted efforts to mitigate this in preparation for a shake up to the current budget’s write-off scheme (even before it was announced, we always prep ourselves for changes to this set up).
Knowing our buyers, what you want and why, we have highlighted the vehicles we think will be of particular interest to nab before the changes, keeping them in high stock and reliably ready to go. The Defender HD9 XU, Defender Limited, Defender HD10 6x6, Defender HD10 XT, ZM 6000 72 inch, ZM 6000 60 inch, ZM 4000 60 inch my ride, and ZM 4000 60 inch are all worth considering. These products offer substantial savings ranging from $1,000 to $2,500, making them awesome options for anyone aiming to benefit from the current asset write-off limit before it expires.
As the asset write-off limit reduction looms, it’s time to evaluate your options and make some strategic decisions about your asset investments. The new scheme will significantly impact tax deductions and by understanding these regulations and acting promptly, you can make the most of the available tax benefits before the deadline!
Want to talk machines? Give the knowledgeable Sutto’s team a call today to discuss your options, and have any asset write-off questions answered!
