Hey all, recently ordered a brand new car worth 75k under business. Ordered it last month, but have now been told there might be a delay till Sept or Oct.
I was going to claim under immediate asset write-off deduction, but understand it can only be done if the vehicle is delivered before 30/6/22?
Is there a grey area we can explore here like paying the invoice in full before delivery?
If not, is it worth doing still? Or I'm better off canceling and buying a second hand?
Why not if the business makes money it gets written off over a longer period, no biggie if you have the cashflow.
If it was purchased purely for the instant asset write-off, then definitely not worth it.
Your business accountant should be able to advise you on the appropriate rules around this. Don't take random X's word on it.
If your business can drop $75k on a car, it can afford a tax accountant or a free call to the ATO.
ATO is black and white on what you can do, but instead you have asked OZ bargain and as such go for it.
If the ATO check the first registered date at any stage, you'd be done for tax fraud… Sound like a good plan?
The asset needs to be available for use by 30 June 2022, so I'd say no.
Also, if it is passenger car, there's an upper limit of $60k, so don't expect you can write-off the full $75k either. Hopefully your accountant had already advised you of this.
Can you even option a Camry to $75k?
Yes
How else will you protect the paint?
Gold plated tissue box holder on the rear dash
Pretty sure most OzBargain Camry drivers would be too scared to risk that because they read an article about a regular box of tissues being the equivalent of a brick when hitting the brakes hard.
Yeah, it's called a Lexus ES350.
Please note that with a car not all can be instant write off.
A car limit applies to the cost of passenger vehicles (except a motorcycle or similar vehicle) designed to carry a load less than one tonne and fewer than 9 passengers.
The car limit is:
$59,136 for the 2020–21 income year
$60,733 for the 2021–22 income year.
Example 1: Purchase of a motor vehicle for business purposes – the effect of the car limit for depreciation
Edward and Edna own and run a small irrigation supplies business and they use the simplified depreciation rules. On 27 September 2020 the business purchased a luxury car designed to carry passengers, for $80,000. The car was purchased before temporary full expensing became available, so the instant asset write-off still applies. The instant asset write-off threshold at the time they first use the car in the business is $150,000.
The cost of the car for depreciation is limited to the car limit at that time ($59,136 for the 2020–21 income tax year).
As the cost of the car is above the $59,136 car limit for depreciation, the business can only claim an instant asset write-off of $59,136 for the year ending 30 June 2021. The business can't claim the excess cost of the car under any other depreciation rules.
They also decide to update their work ute, so the business purchased a ute for $65,000 on 4 October 2020. The ute isn't designed to carry passengers (and has been set up with all the trade tools in the tray) so the car limit for depreciation doesn't apply. The business can claim a full deduction of $65,000 as an instant asset write-off.
It’s as if this information could have been found from a good search….. oh wait…
You might be better off speaking with the car dealer…. don't you think
Is there any requirement that the vehicle be used for income producing purposes?
Definitely not worth doing if you do not get the write off deduction, get a different car.