Toyota Finance[A1] for Small Business
Running a small business? You may be eligible to claim an instant asset tax depreciation deduction where the capital cost of a new, used or demo Toyota is less than $20,000 including when financed by way of a Toyota Business Vehicle Loan.
The recent budget announcement was a welcome surprise for small businesses with an annual turnover of less than $2 million- the announcement of instant tax deductions on assets means small business purchases below $20,000 are now instantly tax deductible. The benefit applies to an unlimited number of individual asset purchases under $20,000, including vehicles. Where a small business uses an asset only partly for business purposes, the instant asset deduction is proportionately reduced to reflect business use.
This new tax timing concession, designed to kickstart small business investment, simplifies the way small businesses can claim deductions. The concession is a helpful cashflow improvement tool for small business in tax profit positions. While the proposed change has not been legislated, the proposal has bi-partisan support from the two major political parties and Toyota Finance[A1] has confidence that the proposed measure will be passed into legislation.
Who is eligible?
Small businesses with an annual turnover under $2 million (the threshold test also aggregates certain related party small businesses sales), who can demonstrate that they are a genuine business.
How much can you claim?
Any business asset with a capital cost under $20,000 is eligible for an instant tax deduction with no limit on the number of individual purchases. Assets over $20,000 aren't eligible for the instant write-off, but can be annually tax depreciated under the small business pool tax depreciation rules. The asset must be acquired on or after 7:30 PM 12 May 2015 and be first used or installed ready for use on or before 30 June 2017.
Thinking of financing a Toyota*sup>?
The good news is the benefit still applies if you choose to finance the purchase of your vehicle by way of Toyota business vehicle loan or a Toyota Access business vehicle loan (finance lease would not be suitable as lessors and not lessees obtain tax depreciation). Small businesses attracted to the concession may wish to speak to their Toyota Dealer to determine what new, demo and used Toyota vehicles are likely to have a capital cost under $20,000 and businesses should also factor into account in determining vehicle capital cost the capital cost of stamp duty. Toyota currently has a range of new and used vehicle options like the Toyota Yaris or New-Look Corolla worth discussion with us while the range and affordability of the certified used and demo vehicles widens the consideration set when thinking of a new business vehicle.
Small business with needs for material handling equipment should consider a purchase from Toyota Material Handling. Within an extensive range of walkie stackers and pallet trucks, most are under the $20,000 threshold. Toyota Material Handling also has an extensive range of used forklifts and skid steer loaders many of which are under the $20,000 threshold. For more information please visit Toyota Material Handling.
To understand the finance options available to you, speak to us or calculate your estimated repayments on our Car Loan Calculator.
How long have I got?
If a small business with a standard balance date of 30 June 2015 was considering instant asset write-off in the current 2014-15 income year, the asset would need to be acquired on or after 7:30 PM 12 May 2015 and first used or installed ready for use on or before 30 June 2015. A vehicle under $20,000 capital cost, where the contract of sale and purchase was entered into after Budget night and the vehicle was delivered and used by the small business by 30 June 2015 would be an example where these criteria would be met.
The proposed concession also applies in the 2015-16 and 2016-17 income years provided first use / installation ready for use occurs within each of those years (but in all cases first use / ready for use must be on or before 30 June 2017).
Small business customers should obtain their own independent advice on the proposed rules that take into account all their particular circumstances.
To learn more about the Small Business Tax Break and whether it's available to you, visit the ATO website and refer also to the Explanatory Memorandum to the Tax Laws Amendment (Small Business Measures No 2) Bill 2015
