Sep 07th, 2023
Are you looking to purchase a new car for your business?
Good news! If you’re a small business owner, you could be eligible to claim an immediate tax deduction, providing the asset is under $20,000.
Yes, you read that correctly. Up until end of the financial year (June 30, 2017), any depreciating assets you purchase for your business, including vehicles, will be written off on your tax.
So, what does that mean for you?
Essentially, end of financial year 2017 will be a lot less ‘taxing’ than previous years for small business owners. But more importantly, it means you can get that car you’ve had your eye on, whether it’s new or second hand, and receive an immediate deduction on your purchase considering it was acquired for <$20,000 excluding GST.
Whether it’s a new coffee van you need, or time for an upgrade on your construction company’s ute, there has never been a better time for small business owners to get ahead on the road.
Assets being purchased that cost $20,000 or less excluding GST that are to be used for 100% business use can get fully deducted off your taxable income, as well as being able to claim the GST input credit. For example, if you purchase a $22,000 (including $2,000 GST) it would effectively translate into a saving of $5,700 at the current company tax rate of 28.5%.
Any assets that are valued over the $20,000 threshold will be deduced based on the standard depreciation method. For example, the ATO assesses the useful life of a business vehicle at a maximum of 8 years.
Weekly payments of only $73/week on $22,000 over 5 years, 30% balloon, at 4.4% (comparison of 4.89%)
If you need assistance from Rostron Finance to find the right car loan or you would like to make an enquiry, please click here.
