The Federal Government has announced a further extension of the Instant Asset Write-off which allows eligible businesses who invest in vehicles and equipment to claim an immediate deduction for certain costs relating to depreciating assets.

How it works

  • Businesses with an aggregated turnover of up to $5 billion may be eligible.
  • Depreciating assets may include new business vehicles and equipment. For businesses with aggregated turnover of less than $50 million, the assets can be second hand.
  • Depreciating assets must be acquired after 6 October 2020 and installed ready for use by 30 June 2023.
  • Businesses may be able to borrow funds to purchase equipment and still claim a deduction for the cost of eligible items.
  • Deduction claims may be made for the year in which the equipment is used or installed ready for use. This may be the same year in which the equipment is financed.
  • Unlimited numbers of new eligible assets of any dollar value (and eligible asset improvements for new and existing assets), if the business has an aggregated annual turnover of less than $5 billion.

Some assets are excluded and a car depreciation limit applies to the cost of passenger vehicles.

The car depreciation limit applies (except a motorcycle or similar vehicle) to a vehicle designed to carry a load less than one tonne and fewer than 9 passengers.

The car limit is $60,733 for the 2021–22 income year.

We therefore recommend that you check with your tax adviser or accountant to make sure the asset you are purchasing is eligible

You can find out more information from the ATO website here