Are you EOFY ready with your asset investments?
The end of the financial year is fast approaching, so businesses only have a few weeks left to buy new assets and benefit from tax deductions for 2017-2018.
June 30 is a date that businesses know all too well. The end of the financial year (EOFY) is just a few weeks away and careful preparation can ensure you benefit from a number of tax minimisation strategies. Purchasing new assets may be one of your most pressing tasks because certain income-producing investments must be installed and ready to use before the new financial year if you want to optimise your deductions.
Instant asset write-off scheme extended
The recent Australian Federal Budget 2018/9 announced an extension to the $20,000 instant asset write-off for SMEs for a further year until June 30, 2019.
This means organisations that have turnovers of less than $10 million per year can continue to immediately deduct the business portion of new asset investments. But, as mentioned, any purchases must have been either already used or installed and ready to use in the financial year that you are making the deductions.
If you're buying a new ute for your construction business, this may not be a problem, as you can drive it straight off the forecourt and into professional use. However, integrating new IT servers at your business or making large-scale production line equipment upgrades could take days or even weeks to organise and complete.
That's why leaving your asset purchases until the last minute could mean you accidentally miss the EOFY cut-off.
Overcoming your EOFY cash flow concerns
Immediate deductions are all well and good, but you may not have the cash on hand to make the purchases in the first place. There are no guarantees the $20,000 instant asset write-off will be extended past next year, so you may only have a couple more opportunities to take advantage.
Fortunately, there are business finance solutions available to help you fund depreciable asset purchases - but not all forms of lending are suitable for the write-off incentive. Contact one of our team at Classic Funding Group to find out which types of finance you can use.
We can also assist with Australian Taxation Office (ATO) debt that you may have accrued as you head into the new financial year. From July 1 2017, businesses with tax debt exceeding $10,000 that is more than 90 days old could risk having their late payment situation disclosed to credit agencies.
This could have a significant impact on your credit score and ability to raise credit in the future, so don't bury your head in the sand - get in touch today.