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Practices are set to go through the third year of ups and downs brought on by the pandemic. But the pursuit of business continuity and growth means that owners still need to make important calls for their practices. The good news is that there are some certainties that you can take advantage of – one of which is an important opportunity to consider and action well ahead of tax time.

As a result of the pandemic’s impact on the economy, the government announced support and financial assistance in recovery planning. The instant asset write-off for businesses was initially increased five-fold – from $30,000 to $150,000. But as part of the government’s 2021/22 budget, it moved to a temporary full expensing rule where there is now no value threshold. This means any business earning up to $5 billion can write-off the full cost of any depreciable asset purchased from 6 October 2020 and first used or installed by 30 June 2022.

So it’s a timely reminder for business owners to look to take advantage of the settings before the end of this financial year. After all, making a significant business purchase – like a new dental chair – can provide benefits beyond its primary purpose such as cash flow, savings for other expenses or upgrades, and increased patient satisfaction.

Another major consideration for tax time is the supply of stock. Ongoing delays from overseas manufacturers, plus a spike in sales and stock shortages, could mean that leaving purchases to the last minute could see deliveries and installation fall outside of the current financial year, so avoid cutting it too close and missing out.

When it comes to financing the goods, it’s been widely assumed that you must pay cash in order to get the write-off. However, you can actually borrow funds to acquire the eligible assets. Facilities such as a chattel mortgage, or equipment loan, may meet the criteria. You can also buy from multiple sources or buy multiple eligible items under one invoice.

Here are a few general rules for the measure to confirm with your accountant:

For assets you start to hold, and first use (or have installed ready for use) for a taxable purpose from 6 October 2020 to 30 June 2022, the instant asset write-off threshold does not apply. You can immediately deduct the business portion of the asset under temporary full expensing
Goods can be new or second-hand
Goods are first held from 6 October 2020, and first used or installed by 30 June 2022
You can make numerous claims across many tax invoices or with multiple items on the one invoice
It’s not a one-time-only offer, just so long as each purchase meets the criteria
If financed, the goods must be under a specific loan type, as not all facilities are appropriate
Assets that fall into this scheme include medical equipment and devices, dental chairs, IT equipment including servers, computer and phone hardware, along with scanners, copiers etc. Plus practice furniture, cabinetry, white goods and so on
All work vehicles to the extent that they are used for business purposes

Remember, the full expensing scheme is a temporary measure. You should always speak with your financial adviser or accountant for specific advice about how it applies to your personal circumstances and needs. The Credabl team is also here for you and can answer your questions.

Whether you’re new to seeking finance or ready for a review, we’re available to chat live on our website credabl.com.au or you can call Deb, Ali J or Ali G in the WA team any time on 08 6280 1255, we’d be happy to help!

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This article is a guide only and does not constitute any recommendation on behalf of Credabl Pty Ltd (ACN 615 968 100) or any of its related bodies corporate (Credabl). The information in this article is general in nature and we have not considered your personal objectives or financial circumstances or needs when preparing it. Before acting on this information you should consider if it is suitable for your personal circumstances. Credabl is not offering financial, tax or legal advice. You should obtain independent financial, tax and legal advice as appropriate.