Tradies rush to buy utes before tax-break ends on June 30
One of the nation’s most popular vehicles is about to become a lot harder to buy next month.
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Tradies are rushing out to buy one car model before a huge tax-break ends next month.
The Albanese government announced during Tuesday night’s budget that a popular tax write-of scheme that tradies use to buy brand new work utes will be slashed on June 30.
Tradies and small business owners now have less than two months to make the most of the tax-break before it drops to a less than a third of the original discount.
The amount businesses are able to claim on new equipment will drop from $65,000 to $20,000.
To add to the pressure, the global car manufacturing industry is still facing major delays due to stock shortages and production slowdowns.
The deduction will no longer be an instant asset write-off with the deduction made over three financial years rather than one.
It will also be restricted to businesses with an annual turnover of less than $10m.
It’s a major pull back from the Albanese government after the measure was boosted during the first wave of the Covid-19 pandemic to allow businesses with a turnover of under $5bn to write-off assets under an unlimited threshold.
It is the lowest limit placed on the Instant Asset Write-Off scheme for new car purchases since it started in 2011, with a limit of $57,000 placed in 2019.
The measure was due to expire on June 30 and the government elected to not renew it.
Small businesses with a turnover of less than $10m will still be able to instantly write off unlimited assets under $20,000 as long as it is “first used” or “installed ready for use”.
The rush to purchase ahead of tax time is expected to extend beyond just cars including ovens, tools and anything else that depreciates in value.
Originally published as Tradies rush to buy utes before tax-break ends on June 30
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