Maximise your tax return with Temporary Full Expensing

Want to make a few purchases before EOFY for your business? With Temporary Full Expensing, there’s likely a tax deduction for that!

What is Temporary Full Expensing?

Temporary Full Expensing (TFE) is effectively an upgraded version of the Instant Asset Write Off (IAWO), with expanded asset coverage, raised thresholds and broader eligibility criteria.

As with the IAWO before it, TFE gives business owners the ability to claim immediate deductions (helping to reduce taxable income) on the full cost of eligible depreciating assets in the year those assets were first used or installed.

Is my business eligible for Temporary Full Expensing?

Initially introduced to help offset the costs of assets purchased for business purposes, TFE has been expanded in FY22/23 with broadened eligibility criteria. You’ll likely qualify for TFE if…

• You’re GST-registered and the assets purchased were first held/used/installed/ready-for-use (for taxable purposes) between 6 October 2020 and 30 June 2023
• You’re an SME with an aggregated annual turnover of less than $50 million or a larger company with an aggregate turnover of under $50 billion
• You’re a small business applying simplified depreciation rules in your tax return

What assets qualify for Temporary Full Expensing?

With no limit on the cost of assets purchased (incl. new and second-hand assets) we’ve outlined a few examples of what qualifies below:

• Vehicles, such as cars, vans, and trucks‍

Note: Whilst passenger vehicles have a ‘car limit’ capped at $64,741, trucks, vans and utes are classed as commercial vehicles and remain uncapped

• Machinery, tools and equipment (incl. tractors, industrial ovens and welding equipment)
• Office equipment & furniture (incl. computers, printers, desks and chairs)
• Building improvements (incl. new roofs, solar panels, security systems, air conditioning, and electrical wiring)

Something to consider… TFE can be used to cover the purchase of multiple assets. For more information on eligible assets, click here.

How to make the most of Temporary Full Expensing

With expanded eligibility criteria, greater asset coverage and raised thresholds, TFE can help lower your businesses tax liability, whilst simultaneously making tax-time purchases more accessible.

Note: Want to avoid impacting cash flow, or dipping into cash reserves to fund the the purchase of new assets? You could use financing to take advantage of TFE this EOFY and claim tax back on interest payments. Want to view your eligibility for business finance. Click here to see if your business qualifies and view your top options through our free online loan-finder.*

*Individuals should always consult an accountant or registered tax agent to determine whether or not Temporary Full Expensing will be advantageous to an individual’s specific financial situation and needs. Temporary Full Expensing is subject to strict eligibility criteria, which may be modified or changed at any given time.

All information provided is correct at time of publication (18/04/2023).