As 2022 progresses rapidly after a period of pandemic-induced disruptions, we now stand at the mid-year mark, approaching a critical date for businesses: 30 June, the end of the financial year and tax season. For those business owners who had plans to add a new truck to their assets during this fiscal year but haven’t taken the necessary steps yet, we’re here to expedite the process with fast truck loan approvals.
Tax time holds significant importance for businesses seeking to capitalize on last-minute deductions through strategic new truck acquisitions and loan choices. Although 30 June is rapidly approaching, there's still an opportunity to secure a truck loan and procure a new vehicle before the deadline. Furthermore, end-of-financial-year deals on new trucks present an enticing opportunity; however, buyers should act swiftly to secure both their orders and financing solutions.
While tax time is always a frantically busy period to finalise investments and acquisitions to realise the tax benefits, added urgency exists this year with the high probability that the RBA will once again hike rates in early July. A strong motivator for operators, wherever possible, to make that new vehicle purchase in the 2021/22 financial year rather than wait until the 2022/23 tax period.
Tax-Effective Truck Finance
All forms of business finance include some tax deductible aspect. Subject to the set-up of the individual business and the ATO rulings around specific deductions. The decision for business owners in regard to truck finance is around which particular truck loan product is best-suited to their business set-up in order to deliver the optimum tax benefit as well as contribute to profitability and financial objectives.
Under current ATO rulings, additional tax benefits are available with Instant Asset Write-Off and temporary full expensing, in this and next financial year. Taking advantage of these measures depends on which loan type is selected.
The choice of truck loan types include:-
- Chattel Mortgage For Truck & Trailer Finance
- Truck Lease
- Commercial Hire Purchase
- Rent-to-Buy
Choosing the most suitable loan type hinges on a range of considerations specific to each business, such as their accounting methods, balance sheet approach, and overarching financial goals.
For businesses navigating Instant Asset Write-Off (IAWO) and temporary full expensing measures, the allure lies in deducting the complete truck purchase amount within the year of acquisition. This stands in contrast to traditional depreciation rules, which spread deductions across multiple years. By immediately deducting a larger sum, taxable income is significantly reduced, translating to lower tax payments – a particularly welcome relief for companies recovering from recent challenging years.
An added advantage of temporary full expensing is its compatibility with Loss Carry Back, which entails potential refunds on taxes paid in previous years, resulting in tangible cash returns.
To tap into these current tax incentives, Chattel Mortgage emerges as the most fitting truck finance option. Its appeal is further heightened by its offering of the lowest interest rates across finance choices – a crucial aspect given the gradual increase in rates as the RBA normalizes the cash rate.
Nonetheless, it's important to note that Chattel Mortgage might not align with all business structures. For those scenarios, Leasing and Rent-to-Buy are alternatives that still facilitate substantial tax deductions through deductible monthly loan repayments.
Collaborating with your accountant for informed loan type selection and engaging our services to secure the most competitive interest rate truck loan will position your business for enhanced productivity and profitability in the years ahead.
EOFY Truck Deals
A quick whip around some of the leading brands to see what deals are on the table for new vehicle purchases. Of course, these are subject to availability so you may need to act quickly. Tip: give us a quick call before you speak with the dealer to start the truck loan application so delays in that regard can be avoided.
Hino is offering a special deal on the 300 Series but only until 30 June 2022. Check out the offer to see if it suits you. The deal includes the clutchless auto transmission variant for the price you’d normally pay for a manual model.
IVECO has a promo on the Daily E6 with 100,000 klms/2 years of complimentary servicing on offer. Could be worth checking out to save dollars in servicing to add a bounce to the business bottom line.
Hyundai is also offering a range of EOFY deals on a number of models with vehicles advertised for immediate delivery. That could mean getting the truck into your operation prior to 30 June in order to realise the available tax benefits.
To assist buyers meet their 30 June deadlines, our consultants are ready to act to get you quick quotes and fast approvals on the truck loan products of your choice. Last minute pre-tax time truck loans are now available through Jade Truck Loans.
Contact Jade Truck Loans on 1300 000 003 for quick, EOFY truck finance.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.
