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Realise Tax Benefits on Equipment Finance

The new financial year is the ideal time to set your business on the right track for making the most of opportunities and programs so you can realise the tax benefits over the coming year. With 2020 being seriously disrupted due to COVID-19, many businesses are looking to make up for lost earnings and getting on with their plans for growth as best they can. Fortunately, there are Government programs in place which you may be in a position to take advantage of in regard to your asset acquisitions and investments.

Throughout the COVID-19 economic crisis, the Federal Government has stepped-up with numerous measures to support both individuals and businesses, with most hoping more is still to come. One measure which was announced back in March 2020 but is still on the table and may be worth you considering is BBI. Named with a typical catchy Government title – Backing Business Investment.

BBI – Don’t Miss the Deadline

While many of the Government’s COVID-19 support measures have run their timeframe or due to finish later in 2020, the BBI measure has a longer lifespan with a deadline of 30 June 2021. This initiative or measure is designed to support a range of businesses – small through to large – with accelerated depreciation allowances on eligible business asset acquisitions.

You may, not unsurprisingly, been a bit distracted to pay close attention to this when it was announced in March, so we’re revisiting the details so you don’t miss the opportunity. As with all business asset acquisitions, Jade Equipment Finance is ideally positioned to provide cost-effective and workable finance solutions at the best interest rates.

BBI Benefits

As with all tax-based decisions, we advise you consult with your accountant as to whether BBI is suited for your individual business. We also advise you discuss which of the finance products offered by Jade Equipment Finance would best suit your business while enabling you to realise the benefits of BBI.

The BBI measures allows eligible businesses, as defined in the guidelines, to accelerate the depreciation rate on assets which are eligible under the guidelines. Specifically, a 50% deduction on the costs of those assets by the 30 June 2021 deadline. Depreciation on the other 50% must be treated according to the existing ATO rulings.

Eligibility: Businesses

The business eligibility criteria will require you to read the guidelines closely at ato.gov.au or discuss with your accountant who is highly likely to be totally across the details.

But in brief:-

  • Eligible business must have turnover of less than $500m for the 19/20 and 20/21 income periods.
  • The ATO has set out differing rules for small business which have more simpler rulings in regard to capital allowances.

Eligibility: Assets

  • In general terms, the assets must be purchased after the announcement of the measure, ie 12 March 2020 and be installed and operating in the eligible business prior to 30 June 2021.
  • But there are some guidelines around what is not eligible especially with R&D equipment and when using other depreciation rulings, so we strongly advise you to read the full details and all the conditions which are published on the ATO website. Such as if you are already taking advantage of the Instant Asset Write-Off measure in regard to the purchase of your requirement.
  • There is however, not a limit on how many assets an eligible business can acquire and apply the accelerated depreciation measure.

A wide range of business equipment may be eligible and there are significant benefits available, so this could be worth considering and definitely worth following-up.

Assets Not Eligible

As with some ATO rulings and many Government programs, not all equipment assets will be eligible to be depreciated under this measure. These include some capital, second hand, low value Division and primary production assets.

Facilitating Your Asset Purchase

When you have made your decision around whether or not this BBI initiative suits your investment plans and decided on your equipment asset purchase, Jade can assist with cost-effective equipment finance.

While the accelerated depreciation measure may offer great tax benefits, a great equipment finance deal may provide additional benefits in easing cash flow and supporting your business growth. Our connections with a wide range of banks and non-bank lenders, allows us access to flexible equipment finance products so our consultants can tailor solutions to directly address your business requirements.

Full selection of finance products including leasing, CHP, Chattel Mortgage, Rent to Own.

  • Fixed interest rates
  • Fixed repayments
  • Fixed loan term
  • And our Jade best interest rates guarantee!

Jade Equipment Finance provides finance for many types of equipment across the full spectrum of Australian industry for sole traders, SMEs, partnerships and large corporations. So to take full advantage of measures and initiatives and the services of a professional, licensed broker that is working in your best interests – contact Jade today.

To discuss flexible, workable equipment finance through Morris Finance contact Jade Equipment Finance on 1300 000 003

DISCLAIMER: THE INFORMATION PROVIDED IS FOR GENERAL CONSIDERATION. ANY REFERENCE TO OFFICIAL GOVERNMENT POLICIES HAS BEEN SOURCED FROM AUSTRALIAN GOVERNMENT AND STATE GOVERNMENT SOURCES. INFORMATION ON INDIVIDUAL VEHICLE SPECS IS SOURCED FROM THE MANUFACTURER WEBSITE. 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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