EOFY: The Best Time For New Equipment
It’s almost that crazy time of year again where everyone is busy running around preparing tax returns, sending out group certificates and doing stocktake. It’s not necessarily a time of year where business owners are thinking about purchasing their new fleet vehicles or buying the latest piece of tech for their industry. As the End of Financial Year (EOFY) quickly approaches, it can be a very stressful period, however now is a perfect time to upgrade your equipment and take advantage of the opportunities that lie within the governments instant asset write off.
In April of this year, the government announced an increase of the Instant asset write off thresholds to $30,000, a $5000 increase from the previous $25,000 threshold for qualifying small businesses with a turnover of less than $10 million, enabling businesses to instantly deduct assets instead of claiming deductions over a number of years. This means it is a great time to take advantage of any EOFY discounts on equipment, whilst getting the most out of your tax return.
In the world of small business, having access to quality equipment can have a significant impact on one’s ability to achieve success. EOFY is an important time for businesses to analyse and review their current processes, to identify how they can improve and stream-line their operations. This may go beyond just replacing a faulty item, and involve investing in new equipment that could drastically improve the efficiency of the business.
However, upgrading equipment can be a significant expense, and many small business owners find that purchasing equipment outright can drain their capital reserves. As a result, many look to external sources of funding, and equipment financing is an ideal solution. Opting to use equipment financing allows small business owners to upgrade their equipment, whilst preserving their working capital for business growth activities.
Equipment financing comes in many forms, however the most common are the Operating Lease and Chattel Mortgage. Under an Operating Lease, borrowers are able to take advantage of the 100% tax deductible repayments, whereas a Chattel Mortgage allows borrowers to own and depreciate the assets themselves. With the range of options available there is a solution to fit the unique needs of each small business.
If you are a small business owner in need of some new equipment, the tax breaks available at EOFY present an ideal opportunity to make that investment. Looks like it’s time to get that new fleet vehicle, brand new coffee machine or 3D laser printing machine!