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Urgent LDV Buying Frenzy to Beat June 30 Deadline for Instant Asset Write-Off

Rev up your engines, tradies and LDV enthusiasts, because the race is on! The current Instant Asset Write-Off tax break for LDV work vehicles is reaching its finish line on June 30, and buyers are in a frenzy to snatch their new wheels before the spending cap drops from $65,000 to a measly $20,000. It's pedal to the metal as businesses scramble to take advantage of this opportunity before it's too late.

Deadline Looms for Instant Asset Write-Off:
Attention all tradies and LDV buyers, mark your calendars for June 30, 2023—the final lap for the current Instant Asset Write-Off tax break. Soon, a new scheme will come into play, capping work car purchases at $20,000. While vehicles above this limit can still be acquired, the tax deduction will be spread over three years instead of a single financial year.

The Rush for Delivery Amidst Challenges:
Tradies and small businesses find themselves caught in a race against the clock, facing multiple hurdles on their path to obtaining new LDV work vehicles. Chronic stock shortages, production slowdowns, and shipping bottlenecks add extra twists to this adrenaline-fueled pursuit. It's a battle to secure those essential wheels before the tax landscape changes.

Current Scheme Benefits and Cap:
Under the existing Instant Asset Write-Off scheme, companies with turnovers of up to $5 billion have been able to claim LDV work vehicle purchases up to $150,000 as a work expense within the same financial year. The scheme has included a cap on LDV vehicles, allowing for deductions on new or used vehicles up to approximately $65,000 for the 2022-23 financial year.

A Farewell to the Current Scheme:
Unfortunately, the current Instant Asset Write-Off tax break is reaching the end of its road on June 30, 2023. The revised scheme, as announced in the 2023-24 Federal Budget, will introduce a $20,000 cap for new and used work cars, limiting eligibility to businesses with turnovers of up to $10 million. This means fewer businesses will enjoy the luxury of deducting the full LDV purchase in a single financial year.

Narrowing Eligibility and Vehicle Options:
Come July 1, 2023, the list of eligible vehicles for the Instant Asset Write-Off will dramatically shrink. However, used LDVs also qualify if purchased for work purposes. LDVs costing more than $20,000 will require deductions to be spread over three financial years, making it essential to plan accordingly.

Understanding the Write-Off and Seeking Advice:
Let's clear the air and avoid any misunderstandings: the Instant Asset Write-Off tax break does not mean a full refund of the vehicle's purchase price come tax time. Instead, it allows the amount paid for the LDV work vehicle to be used as a deduction, reducing the taxable income of the business. It's crucial to remember that only the work-related portion of vehicle expenses can be applied to the tax deduction. For personalized advice on how these changes may impact your business or individual circumstances, consult a qualified tax expert or accountant.

Disclaimer: This news story serves as a guide and does not constitute tax advice. For specific information tailored to your business and individual circumstances, consult with a qualified tax advisor or accountant.