As June 30 approaches, many business owners are reviewing their EOFY asset purchases as part of broader tax planning sessions with their accountants. Reviewing their numbers and looking for ways to improve their tax position before year-end. One area that’s often missed, or left too late, is how equipment or asset purchases are financed.
If you’re upgrading machinery, buying vehicles, or investing in tools for growth, the way you fund those purchases can significantly impact your cash flow and tax outcome.
Here’s what business owners need to keep in mind before the clock runs out.
Timing Matters: It’s Not Just What You Buy, But When It’s Finalised
To take advantage of current tax incentives—like the Instant Asset Write-Off—the asset generally needs to be:
- Installed and ready for use
- Fully paid for (or finance settled) before 30 June
This is where timing can trip people up. We regularly see businesses get caught in mid-June when lender timeframes can no longer guarantee settlement before EOFY—resulting in missed deductions.
May is the smart time to act.
Understanding the Current Rules on Asset Write-Offs
The Instant Asset Write-Off is currently available for small businesses (with turnover under $10 million) and allows an immediate deduction for the business portion of the cost of assets under $20,000, provided the asset is:
- First used or installed ready for use between 1 July 2023 and 30 June 2025
- Used for a taxable business purpose
For assets above the threshold—or for businesses that don’t qualify—depreciation rules still apply, but deductions may be spread over several years.
Finance Structure Makes a Difference
The way you finance EOFY asset purchases can impact not just this year’s tax return but also your long-term cash flow and credit position. Here is a sample of the different financing options.
| Finance Type | Tax Treatment |
| Chattel Mortgage | Depreciation and interest deductible over time |
| Finance Lease | Lease payments typically deductible |
| Operating Lease | Payments usually deductible; asset returned at end |
| Equipment Rental | Fully deductible as operating expense |
| Cash Purchase | Immediate deduction if eligible under IAWO |
Working with your accountant and financing partner, can help you structure things correctly to support both short-term tax relief and long-term business planning. For the latest details on Instant Asset Write-Off eligibility, visit the ATO’s guide to Instant Asset Write Off.
Don’t forget, if you finance the asset, you may not have paid anything from your cash flow, but you may qualify for the tax deduction if you get your timing right. Need help reviewing your EOFY asset purchases? Let’s run the numbers or coordinate with your accountant.
A Real Example: Claiming $21K in Tax Relief
“Our client structured a $70,000 equipment deal in May. In the first year alone, they were able to claim over $21,000 in depreciation, thus reducing their tax bill, whilst preserving their working capital and matching repayments to seasonal cash flow.”
These wins only happen when finance is planned proactively—not when it’s rushed in June.
May is the Window — Not June
Most lenders will be at full throttle by mid-June. If you’re planning to upgrade or replace equipment, May is your best chance to settle on time and still claim.
Strategic Tips for EOFY Asset Purchases
EOFY financing isn’t just about making a purchase, it’s about doing it the right way. When it’s well structured, it can:
- Improve cash flow
- Reduce your tax bill
- Free up capital to reinvest in other parts of the business
Need to run the numbers or talk through a potential scenario?
Next Steps:
- Book a quick EOFY finance chat → Contact Us
- Learn more about how we support business finance solutions tailored to growth
- Or share your plans and we’ll help review your options
- We’re happy to coordinate with your accountant to ensure everything lines up before the cutoff.
Disclaimer
This article is for general information only and doesn’t constitute tax or financial advice. Speak to your accountant or tax adviser to confirm what applies to your specific circumstances.
