EOFY: How to make the most of the instant asset write-off

End of Financial Year Savings Concept with piggy bank EOFY building blocks and wood calendar on white wood table.

With June 30 fast approaching, now is time for small-business owners to start evaluating the year that was and plan for what they hope might be the best financial year of their business.

To set yourself up for success you may need to do some investing in vehicles or equipment and the end of financial year is the perfect time to snap up a bargain on these items. Better yet, you may be eligible to now make the most of the instant asset write-off.

What is an instant asset write-off?

An instant asset write-off allows businesses to immediately write-off, or depreciate, the cost of an asset in the first year it is used or installed, reducing taxable income. This can allow you to write off costs in one single tax claim this financial year rather than over several years, saving you time and money.

The assets can be new or second-hand provided they’re ‘new’ to your business. Items can include things such as work vehicles, tools and machinery, computer hardware, office/store fit-outs, furniture or storage solutions such as sheds or containers.

The great news is that as part of the stimulus package for economic hardship caused by COVID-19, the Government Instant Asset Write-off package threshold has increased from $30,000 to $150,00. As part of this package, eligibility now extends to business with an aggregated turnover of less than $500 million, up from $50 million.

To be eligible, the business must purchase the asset either outright or through finance. Leased assets, for obvious reasons are ineligible.

Sounds great, but where am I getting this cash from?

The reality is that a lot of small businesses simply don’t have the cash to splash this time of year but as the old saying goes ‘you have to spend money to make money’. If you’re struggling to come up with the funds to power your FY22 dreams, a business loan could be the solution. 

A business loan is a great way to help you purchase those assets with minimal disruption to your cashflow. Once you’ve purchased and installed your equipment, you can claim the instant asset write-off during this year’s tax time.

Business loans function similarly to other loan products. Whether you’re after commercial vehicle finance or equipment finance, your lender can provide the loan to assist with your business’ working capital or the purchasing of an asset, and if approved, you’ll be charged either a fixed or variable interest rate over the loan term.

If you’re short on cash but keen to take advantage of the instant asset write-off this end of financial year, iSelect in partnership with Valiant, can help you secure appropriate finance in as little as 24 hours to put towards new equipment, vehicles, machinery or other business assets*.

With the end of financial year just around the corner, now is the time to act to ensure you don’t miss out on getting finance approved for a business loan. It could just be the key to your best financial year yet.

iSelect Business Loans disclaimer

*iSelect does not arrange business loans products, but can refer you to Valiant who does provide such services and can help you compare business loan products. Valiant Finance Pty Ltd (ABN 95 606 560 150) holds Australian Credit Licence 500 888. iSelect and Valiant do not compare all providers in the market, or all products offered by all providers. If you click through to the Valiant website and acquire a business loan through Valiant, iSelect earns a commission from Valiant.

Any advice provided on this website is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice iSelect gives you, having regard to your personal situation, before acting on iSelect’s advice or purchasing any policy.

About iSelect

At iSelect, we’re passionate about helping Australians with their household bills and save time, effort and money.  We are Australia’s go-to destination for comparison across insurance, utilities and personal finance products made available from our range of providers and our service is provided at no cost to the customer. We compare a wide range of Australia’s leading brands but unlike other comparison sites, we are not owned by an insurance company.  Our trained consultants help Australians to compare, select and save.