Temporary Full Expensing ends in less than 5 months. What then?

The super-generous plant and equipment immediate tax write-offs enjoyed by small business over the pandemic period are set to end on 30 June 2023. What happens next and what strategies should you employ?

From 12 March 2020, you could write-off plant & equipment costing less than $150,000. From 6 October 2020, the upper limit was removed entirely until 30 June 2023 - “Temporary Full Expensing”.

Stripping away all the pandemic incentives, we will soon return to the underlying depreciation regime known as “Simplified Depreciation for Small Business”. A “Small Business” is one with a turnover of less than $10M pa. Simplified depreciation allows an “instant asset write-off” for an item costing less than $30,000. The relevant date is when the asset is first used or installed ready for use.

So, strategically, if you were planning to acquire an an item of plant costing more than $29,999 excluding GST, it would be more tax effective to do so before 30 June 2023, provided it can be delivered and installed by then. Time is short!