Due to fall-out from the coronavirus alone, the first half of 2020 has been challenging, confusing and confronting for business. But the Government stimulus packages did provide some relief though not all businesses have been in a position to take advantages of the measures before the deadline expired. Fortunately for some, there is good news on that front.
In particular in regard to the Instant Asset Write Off (IAWO) initiative which was announced by the Prime Minister, Scott Morrison in March as part of the business stimulus package. This was a key element of the Government’s multi-billion dollar assistance for business and received with some level of enthusiasm. But the deadline of 30 June 2020 to have acquired the assets and have them operational in the business was not a realistic prospect.
Many truck owners and operators have been gratefully busy working with no time to devote to organising a truck purchase. If you had plans to invest in a new truck or several vehicles but shelved them due to lack of time or just being cautious, now could be the time to revisit those plans.
The Government has extended to IAWO measure deadline from 30 June to 31 December 2020 with expectations that up to 3.5 million businesses may be in a position to benefit.
In our COVID-19 articles we covered the detail of the IAWO measure but we’ll revisit the detail for those who are now interested in the opportunity. But before we get into the detail, we advise that business owners consult with their accountants to ensure their business is eligible for this IAWO measure.
IAWO: Timeline
- Prior to March 2020, ie prior to the coronavirus pandemic, there was a $30,000 threshold to write-off assets such as truck purchases, under ATO regulations.
- In March 2020, as part of a series of inventive measures for businesses to stimulate the economy, that threshold was increased to $150,000 for businesses that had an annual turnover of up to $500m
- Meaning, if you purchased a truck for say $100,000, previously you would have only been able to write-off $30,000 in that financial year. Under the new measure, you would be able to write-off $100,000. Subject of course to the accounting system you implement.
- Shortly after the announcement came to ‘lockdown’ with some businesses forced to close, others experiencing much reduced businesses and some – flat-out keeping supermarket shelves stocked with supplies!
- Leaving little interest in implementing investment plans with a truck purchase before 30 June 2020 and hence, take advantage of the IAWO in the 19/20 financial year.
Deadline Extended
In early June 2020, with many restrictions lifted much early than previously expected, the Government announced further measures to stimulate the economy and the much-needed bounce back.
Treasurer Josh Frydenberg and Senator Michaelia Cash jointly released a statement announcing that the IAWO deadline was extended from 30 June to 31 December 2021. They said the extension was intended to encourage businesses to implement investment plans while providing support for the wider economy through the acquisition of these assets.
They also said that the extension was designed to enable eligible business to bring forward tax deductions to improve cash flow.
Can you benefit from IAWO?
If you planned to buy a new truck but deferred the investment, now may be the time to make a move and have your new truck in operation by 31 December 2021. The initiative is applicable to each individual asset purchased, so if you need to purchase several trucks, all may be eligible.
Read the full detail of the IAWO on this original fact sheet (replace the 30 June deadline with 31 December) and of course, chat with your accountant who should know if this is right for you and if your business is eligible.
Cheap Truck Loans to Support Your Business
Fortunately Jade Truck Loans doesn’t place expiry dates on our cheap truck loan offer. We’re always working to achieving the cheapest truck finance deals at the best interest rates for all our truck loan customers – at all times!
We offer the full portfolio of business finance products including Chattel Mortgage for commercial vehicle financing, Rent to Own truck finance, Truck leasing, CHP – but not all may be suitable for the IAWO. Your accountant should be able to assist with that issue.
The IAWO applies to both new and used assets, in this case trucks, purchased from dealers, private sellers and at auction. Your Jade consultant can provide a quote for your new or used truck finance, arrange pre-approved finance and fast approvals if you want to snap-up a real bargain in a hurry.
As professional finance brokers we are accredited with a large number of banks and lenders so we have a huge selection to source your loan. But if you do have special reasons for wanting to use your own bank for the finance, your Jade consultant will negotiate and source a quote from your bank.
To discuss the options for your truck loan requirements contact us on 1300 000 003 to speak with a Jade Truck Loans consultant.
DISCLAIMER: THE INFORMATION PROVIDED IS FOR GENERAL CONSIDERATION. ANY REFERENCE TO OFFICIAL GOVERNMENT POLICIES HAS BEEN SOURCED FROM AUSTRALIAN GOVERNMENT AND STATE GOVERNMENT SOURCES. NO LIABILITY IS ACCEPTED FOR ANY ERRORS IN PRESENTATION OR INTERPRETATION OF THE FACTS AS PROVIDED BY THESE SOURCES. WE ADVISE ALL INDIVIDUALS AND BUSINESSES TO REFER TO THEIR ACCOUNTANT OR FINANCIAL ADVISOR FOR PROFESSIONAL ADVICE SPECIFIC TO THEIR INDIVIDUAL CIRCUMSTANCES.
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