2023 Update
As of 6 October 2020, Australian businesses with an aggregated turnover of less than $5 billion have been able to take advantage of tax rebates under the government’s Temporary Full Expensing depreciation incentive. Businesses have been able to access full write-offs for eligible assets, under Temporary Full Expensing. This means that after tax rebates are applied, they are in some cases coming away with a free machine (or machines)!
There’s still opportunity available to take advantage of this depreciation incentive while it lasts, but you need to be quick.
We spoke about the incentives in our blog in 2021, and are here to remind you that you still have the opportunity to take advantage of the incentives (these were originally set to apply in the 2020–21,2021–22 years only, but were extended to include the 2022-23 income year). Therefore, you still have a couple of months to purchase new or second-hand equipment, or have improvements made to equipment, before the incentive period closes.
Act now to take advantage of the incentives!
The Temporary Full Expensing depreciation incentive only applies if you first hold, use or install ready for use your equipment for a taxable purpose* before 30 June 2023 (EOFY). This means that if you’re considering taking advantage of the scheme, you need to make your purchase and receive the equipment by the end of June. This doesn’t leave you with a whole lot of time.
Luckily, if you’re looking for material handling or height access equipment, Auslift has the newest models in stock right now! So, if you make your order, you won’t need to wait, and will be able to use those incentives.
(Disclaimer: you should speak with your accountant and/or with the ATO to confirm you are eligible for the scheme, before making any purchase.)
Background - What are the depreciation incentives?
A collection of unique tax depreciation incentives was introduced in 2020 by the government as a measure to assist businesses in the recovery from the impacts of the coronavirus (COVID-19) pandemic. (See more on these economic stimulus measures here.)
We won’t cover all the depreciation incentives here, as only one incentive—Temporary Full Expensing—applies to new purchases of new or second-hand equipment. The other incentives are worth looking into if you already purchased access or material handling equipment and want to claim depreciation on them. Click below for more ATO information on eligibility and cut-off dates for the:
- Instant Asset Write-Off - to 11 March 2020
- Instant Asset Write-Off – from 12 March 2020
- Backing business investment
If you’re wanting to claim depreciation on equipment you’re yet to buy, read on to find out about Temporary Full Expensing on newly acquired equipment.
What is Temporary Full Expensing?
For those considering buying equipment, Temporary Full Expensing allows a full write-off for eligible assets.
The asset (such as a new knuckle boom lift or second-hand scissor lift) must be:
- held at or after 6 October 2020 (Budget Time), and
- first used or installed for taxable purposes before 30 June 2023.
Anything used or installed after 30 June 2023 will be exempt.
What is a full write-off?
A full-write off deducts the taxable use portion of the cost of an asset. The taxable use portion is that used for your business. So if you were using an asset for both business and personal use, you could only claim a deduction for the business use component.
Note that a full write-off may also be available for improvement costs for eligible assets. See the ATO page on Temporary Full Expensing for more info on what can be claimed.
Eligibility for Temporary Full Expensing
The following eligibility criteria apply:
- You business must have an aggregated turnover of less than $5 billion
- If you are a corporate tax entity*, you must meet the alternative income test.
*See Eligible entities to confirm your eligibility.
Timings:
For the 2020–21, 2021–22 and 2022-23 income years, if eligible, you can claim in your tax return a deduction for the business portion of the cost of:
- eligible new assets first held, first used or installed ready for use for a taxable purpose* between 7.30pm AEDT on 6 October 2020 and 30 June 2023.
- eligible second-hand assets where both of the following apply
- The asset was first held, first used or installed ready for use for a taxable purpose between 7.30pm AEDT on 6 October 2020 and 30 June 2023.
- Your aggregated turnover is less than $50 million.
- improvements incurred between 7.30pm AEDT on 6 October 2020 and 30 June 2023 to
- eligible assets
- existing assets that would be eligible assets except that they are held before 7.30pm AEDT on 6 October 2020
- eligible assets of small business entities using the simplified depreciation rules and the balance of their small business pool.
Important notes:
- Height access equipment should fall into the category of Eligible assets under Temporary Full Expensing, but will be excluded if you don’t intend for them to ever be located in Australia, or you won't principally use them in Australia for the principal purpose of carrying on a business. For more information on asset eligibility, see the ATO page on Eligibility for Temporary Full Expensing.
- You should always double check your eligibility for Temporary Full Expensing with your accountant or with the ATO. Don’t assume you are eligible and buy costly equipment until you make sure.
- You can opt out of Temporary Full Expensing for an income year on an asset-by-asset basis if you aren’t using the simplified depreciation rules. You must notify the ATO of this.
For more information on the current tax incentives, see the following ATO pages:
To Summarise…
If you’re considering a new purchase of EWP access equipment or material handling equipment, you have a short period of time in which to take advantage of the enticing Temporary Full Expensing incentive. Again, you need to have both purchased and first used your new equipment, or had improvements to an eligible asset completed, by 30 June 2023 in order to be eligible (amongst other eligibility conditions). This gives you only two months to place your order, receive your equipment, and get the equipment into operation, or to ensure improvements are completed, so now’s the time to act!
Disclaimer: This information is general in nature and refers directly to information available on the Australian Taxation Office Government website. Please refer to your accountant for financial advice on what these incentives could mean for you and your business.
Auslift can help
We at Auslift can answer all your questions on choosing the right piece of height access equipment or material handling equipment for your needs. And if you’re in the Greater Melbourne area, we’re happy to visit your worksite to assess conditions and recommend the most suitable equipment for you.
We are authorised factory dealers for some of the best brands of EWP access and material handling equipment. Our newest models of equipment come with full factory warranties and our used equipment comes with an up-to-date service. For the best pricing and factory direct deals, get in touch with us today.
And for all the tax stuff, please speak with the ATO or your accountant.
Enticing Government depreciation incentives on business assets are currently available, so it might be a good time to invest in access equipment or material handling equipment while incentives last.
Under the Temporary Full Expensing depreciation incentive, you may be able to get a full write-off for eligible assets. Time is running out, so read on to find out how you can make the most of this incentive.
Disclaimer: This information is general in nature and refers directly to information available on the Australian Taxation Office Government website. Please refer to your accountant for financial advice about your specific business needs.
What are the depreciation incentives?
A collection of unique tax depreciation incentives were introduced in 2020 by the government as measures to assist businesses in the recovery from the impacts of the coronavirus (COVID-19) pandemic. See more on these economic stimulus measures here.
We won’t cover all the depreciation incentives here, as only one incentive (Temporary Full Expensing) applies to new purchases of new or second-hand equipment.
The other incentives are certainly worth looking into if you’ve already purchased access or material handling equipment and want to claim depreciation on them. Click these ATO links for more information on eligibility and cut-off dates for the:
- Instant Asset Write-Off - to 11 March 2020
- Instant Asset Write-Off – from 12 March 2020
- Backing business investment
Those wanting to claim depreciation on equipment they’re yet to buy, will need to read on to find out about Temporary Full Expensing on newly acquired equipment.
What is Temporary Full Expensing?
For those considering buying equipment, Temporary Full Expensing allows a full write-off for eligible assets.
The asset (such as a new knuckle boom lift or second-hand pallet jack) must be:
- held at or after 6 October 2020 (Budget Time), and
- first used or installed for taxable purposes before 30 June 2023.
Anything used or installed after 30 June 2023 will be exempt (hence why it is called ‘temporary’.
What is a full write-off?
A full-write off deducts the taxable use portion of the cost of an asset. The taxable use portion is that used for your business. So if you were using an asset for both business and personal use, you could only claim a deduction for the business use component.
Note that a full write-off may also be available for improvement costs for eligible assets. See the ATO page on Temporary Full Expensing for more info on what can be claimed.
Eligibility for Temporary Full Expensing
The following eligibility criteria apply:
- You business must have an aggregated turnover of less than $5 billion
-
If you are a corporate tax entity*, you must meet the alternative income test.
*See Eligible entities to confirm your eligibility.
Timings:
For the 2020–21, 2021–22, and 2022-23 income years, if eligible, you can claim in your tax return a deduction for the business portion of the cost of:
- eligible new assets first held, first used or installed ready for use for a taxable purpose* between 7.30pm AEDT on 6 October 2020 and 30 June 2023
- eligible second-hand assets where both of the following apply
- The asset was first held, first used or installed ready for use for a taxable purpose between 7.30pm AEDT on 6 October 2020 and 30 June 2023.
- Your aggregated turnover is less than $50 million.
- improvements incurred between 7.30pm AEDT on 6 October 2020 and 30 June 2023 to
- eligible assets
- existing assets that would be eligible assets except that they are held before 7.30pm AEDT on 6 October 2020
- eligible assets of small business entities using the simplified depreciation rules and the balance of their small business pool.
Important notes:
- Height access equipment should fall into the category of Eligible assets under Temporary Full Expensing, but will be excluded if you don’t intend for them to ever be located in Australia, or you won't principally use them in Australia for the principal purpose of carrying on a business.For more information on asset eligibility, see the ATO page on Eligibility for Temporary Full Expensing<.
- You should always double check your eligibility for Temporary Full Expensing with your accountant or with the ATO. Don’t assume you are eligible and buy costly equipment until you make sure.
- You can opt out of Temporary Full Expensing for an income year on an asset-by-asset basis if you aren’t using the simplified depreciation rules. You must notify the ATO of this.
To Summarise...
If you are considering a new purchase of EWP access equipment or material handling equipment, now’s a great time to think seriously about it.
The Temporary Full Expensing incentive is exactly that, temporary. To take advantage of it you need to have both purchased and first used your new equipment before 30 June 2023. This gives you a little over 6 months to place an order, receive the equipment, and get the equipment onto your worksites, so decisions should happen soon. This is general information about the Government incentives, please refer to your accountant for financial advice on what these incentives could mean for you and your business.
Auslift can help
Though we at Auslift can’t advise you on the tax stuff (please speak with your accountant for that), we can answer all your questions on choosing the right piece of height access equipment or material handling equipment for your needs. We’re also happy to visit your worksite to assess conditions and recommend the most suitable equipment for you. Get in touch today.
