Temporary Full Expensing of assets
As part of the 2021-22 federal budget, the Government announced temporary full expensing will be extended for 12 months.
Businesses with an aggregated turnover of less than $5 billion will be able to deduct the full cost of eligible depreciating assets that are first held, used or installed ready for use for a taxable purpose from 7.30pm AEDT on 6 October 2020 to 30 June 2023. This will be an extension from 30 June 2022.
Treasurer Josh Frydenberg said: “Over 99% of businesses, employing over 11 million workers, can write off the full value of any eligible asset they purchase.
"This has seen their spending on machinery and equipment increase at the fastest rate in nearly seven years… we again go further, announcing the extension of these measures for a further year until 30 June 2023, so a tradie can buy a new ute, a farmer a new harvester and a manufacturer expand their production line."
These measures are designed to turbo charge the speed of the deduction and lower tax bills to help with your cash flow.
Temporary full expensing also applies to eligible second-hand assets for businesses with an aggregated turnover less than $50 million. For assets acquired prior to this date, the instant asset write-off measures apply. Businesses with an aggregated turnover of less than $500 million may deduct the full cost of an asset up to $150,000.
Carry-back tax losses
The Australian Government has also announced an extension to the temporary loss carry-back. This will allow eligible businesses with a turnover of less than $5 billion to carry-back tax loss from the 2022-23 income year and apply it against tax paid in a previous income year. The scheme can be applied retrospectively as far back as the 2018-19 income year.