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_Mac3956(Newbie)Newbie
10 Apr 2021

Hoping to get guidance here. I became a sole trader last year (IT / Marketing consultant) with contract work from several clients that I visit on-site in my personal car. Last year my financials were simple so I lodged my own tax return, i'm on track to make $70-$75k (not a big dog) this year and not registered for GST so don't have an accountant.

I'm wanting to purchase a new car soon (before 30 june 2021) to use 70% for work purposes. I know i missed the boat in December on the $150k instant asset ride off but is there other current scheme where i can claim the purchase or other benefits possible aside from just claiming depreciation via logbook at tax time?

Thank you in advance for any help.

2,830 views
1 replies
2,830 views
1 replies

Most helpful response

Most helpful reply

BlakeATO(Community Support)Community Support
12 Apr 2021

Hi @Mac3956

If you purchase a new vehicle now, you're right in thinking you won't be able to use the instant asset write-off. The threshold for instant asset write-offs purchased after 31 December 2020 is now $1,000.

A similar mechanism you can use is the temporary full expensing measure. This measure falls under general depreciation rules instead of simpler depreciation for small business rules. This effectively has the same end result as the instant asset write-off, just with different rules.

Under temporary full expensing, you'll be able to claim the business portion of the asset entirely in one year. Using this method, you can still claim other vehicle related expenses, like maintenance and running costs.

Keep in mind that if the vehicle is a car, there is a limit to the amount you can claim, even if the car cost more than that. The car limit for 2021 is $59,136 in total. This means if you use 70% for work purposes, your maximum claim is limited to $41,395.20.

You can read more about temporary full expensing and the car limit on our website.

All replies

Most helpful reply

BlakeATO(Community Support)Community Support
12 Apr 2021

Hi @Mac3956

If you purchase a new vehicle now, you're right in thinking you won't be able to use the instant asset write-off. The threshold for instant asset write-offs purchased after 31 December 2020 is now $1,000.

A similar mechanism you can use is the temporary full expensing measure. This measure falls under general depreciation rules instead of simpler depreciation for small business rules. This effectively has the same end result as the instant asset write-off, just with different rules.

Under temporary full expensing, you'll be able to claim the business portion of the asset entirely in one year. Using this method, you can still claim other vehicle related expenses, like maintenance and running costs.

Keep in mind that if the vehicle is a car, there is a limit to the amount you can claim, even if the car cost more than that. The car limit for 2021 is $59,136 in total. This means if you use 70% for work purposes, your maximum claim is limited to $41,395.20.

You can read more about temporary full expensing and the car limit on our website.

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