Tax-Effective Finance For Construction Businesses This EOFY
As the end of the financial year (EOFY) approaches, it’s important for construction businesses to start preparing for tax time. With the right financial planning, businesses can not only minimise their tax liabilities but also take advantage of tax-effective finance to invest in new equipment and machinery.
Instant Asset Write-off ends 3oth June 2023
One way construction businesses can make the most of their EOFY is by taking advantage of the instant asset write-off. This is a government initiative that allows eligible businesses to instantly deduct the full cost of any asset they purchase, as long as it costs less than a certain threshold.
For the 2022-23 financial year, the instant asset write-off threshold is $150,000. This means that eligible businesses can claim an immediate tax deduction for the full cost of any asset they purchase that is below this threshold.
Eligibility
To be eligible to use the instant asset write-off on an asset, several factors must be considered. These include the aggregated turnover of the business and any associated businesses, the date of purchase, the date when the asset was first used or installed for use, and the cost of the asset being less than the threshold. These criteria must be met to claim the instant asset write-off and reduce taxable income. Details on the ATO
How To Take Advantage Of Tax-Effective Finance
So, how can construction businesses take advantage of the instant asset write-off and invest in new equipment and machinery? One way is through tax-effective finance.
Tax-effective finance options, such as chattel mortgages and hire purchase agreements, can help businesses finance the purchase of new assets while also maximizing their tax benefits. These finance options allow businesses to spread the cost of the asset over time, while also providing them with a range of tax benefits.
For example, with a chattel mortgage, the lender will lend you money to purchase the asset and put a ‘mortgage’ over the asset as security for the finance. You will be the registered owner of the asset throughout the contract. This means that you can claim the instant asset write-off deduction for the full cost of the asset in the year you purchase it.
Similarly, with a hire purchase agreement, you can finance the purchase of an asset and claim the instant asset write-off deduction for the full cost of the asset in the year you purchase it. The asset is technically owned by the lender until you make the final payment, at which point ownership transfers to you.
By taking advantage of tax-effective finance options, construction businesses can not only invest in new equipment and machinery but also minimise their tax liabilities and maximise their tax benefits.
EOFY Support
At Advance Lending Australia (ALA), we specialise in providing tax-effective finance solutions for businesses in the construction industry. Our experienced team can help you navigate the complexities of EOFY and find the right finance option to suit your business needs. Whether you’re looking to purchase new equipment, upgrade your fleet, or invest in technology, ALA can help you access the finance you need to achieve your business goals.
In addition to tax-effective finance options, ALA also offers a range of other services, including equipment finance, vehicle finance, and business loans. Our team of finance experts can work with you to develop a customised finance solution that meets your specific business needs.
In conclusion, as the end of the financial year approaches, it’s important for construction businesses to start preparing for tax time. By taking advantage of the instant asset write-off and tax-effective finance options, businesses can invest in new equipment and machinery while also minimising their tax liabilities and maximising their tax benefits.
At ALA, we’re committed to helping businesses in the construction industry access the finance they need to grow and succeed. Contact us today to learn more about how we can help you get prepared for EOFY through tax-effective finance. 1300 300 770 info@advancelending.com.au
Things you should know:
-Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.
-We recommend that you consult your accountant to confirm the tax benefits available to you prior to entering into any finance agreement. The information provided is for product description purposes and is not intended to be used as taxation, financial or legal advice.
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