Instant asset write-off when buying a vehicle
Immediately write-off the cost of a new or used car*
As part of the federal government’s response to the COVID-19 outbreak, the existing instant asset write-off initiative has been extended from $30,000 per asset up to $150,000 per asset. This gives businesses an incentive to make a large purchase, such as car, ute or van.
These expanded measures are already in effect for businesses with annual revenue up to $500m with the scheme set to close at June 30, 2020.
The rules allow businesses to immediately write off the cost of assets – under the threshold – and claim a deduction for the business portion of the expense in the first year the asset is used or installed. New and used vehicles are eligible.
*It is important to note that the depreciation a business owner can claim is still limited to $57,581 for cars.
The government is hoping that these initiatives will encourage investment and provide a much needed cash injection to the economy. Businesses who finance the purchase of assets are equally eligible to the instant write-off scheme and can continue to expense appropriate interest payments over the life of the loan.
The information above is provided on a general advice basis and should not be considered as a replacement for seeking your own professional advice, appropriate to your business. John Hughes recommends that you seek your own professional advice prior to any vehicle purchase, to confirm eligibility.
If you are considering taking advantage of this incentive then John Hughes has a large range of vehicles which fall under this claiming threshold:
LDV G10 People Mover
Volkswagen Caddy Van
What can be classified as a car?
How does the $150,000 immediate write-off work?
Can multiple cars be purchased?
Are second hand cars eligible?
What if I am trading in a vehicle to buy a new one?
What businesses are eligible for the immediate write-off?
What if the car is not wholly used for business purposes?
Can I finance the purchase of a new car and still be eligible?
Are there any other costs associated with getting a car ready for use in my business?