As anticipated, the government confirmed in the recent budget announcement that Temporary Full Expensing, which has been available to all businesses since 6 October 2020, will no longer be available from 1 July 2023. This means that businesses can no longer immediately claim the full cost of all assets purchased, except as outlined below under the Instant Asset Write-Off rules, which replace Temporary Full Expensing.

 As an incentive for small businesses to continue investing, an Instant Asset Write-Off of $20,000 has been announced from 1 July 2023 to 30 June 2024.

 We have provided further information below about the Instant Asset Write-Off. We note that these rules are still to be legislated through parliament at the time of writing.

Here are the key points to note in relation to the Instant Asset Write-Off:

• It applies only to businesses with turnover of less than $10m.
• It applies to both new and used assets.
• To be eligible, the new asset needs to be first used or installed between 1 July 2023 and 30 June 2024.
• The asset must be purchased for taxable purposes. If there is a portion of use related to other purposes, you can still claim a deduction for the business portion of the cost.
• The threshold of $20,000 applies to each asset’s GST exclusive amount separately, which means you can claim an immediate tax deduction for multiple assets.

For an asset purchase over this threshold, you can place it in a small business pool, which means you claim 15% depreciation in the first year of use/ installation and 30% in the subsequent years.

 If you are planning significant asset purchases for 2023-2024, please contact us ahead of time so that we can advise on the best approach to depreciate these.

 For any other questions regarding tax and accounting depreciation, please feel free to get in touch on 0416 919 036 or  contact@gpgbusinessadvisory.com.au.