Equipping your practice for success

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veterinary practice equipment

This article is sponsored content brought to you by Credabl.

A veterinary practice’s equipment must perform efficiently and will vary based on its size, scope, specialty and tech advancements. Inevitably, equipment and goods will need to be purchased new or upgraded to ensure up-to-date and better care, as well as reliable results.

Fortunately, there is a key tax incentive that supports business investment, allowing you to equip your practice for success.

When the pandemic first hit, the government announced its economic plan, which saw the instant asset write-off threshold increase five-fold, from $30,000 to $150,000 for eligible assets. Initially set to end on 30 June 2020, it was extended to 30 June 2022.

Then, as part of the 2021/22 budget, it moved to a temporary full expensing rule where there is now no value threshold. Any business earning up to $5 billion can write-off the full cost of any depreciable asset.

Temporary full expensing was extended to 30 June 2023 and then it stops. You should consider whether making capital purchases in this financial and next is more optimal i.e. spread the deduction over two tax periods rather than making a mad dash this time next year. Always check in with your accountant about your specific circumstances in relation to this incentive.

General rules to confirm with your accountant:

  • For assets you start to hold, and first use (or have installed ready for use) for a taxable purpose from 6 October 2020 to 30 June 2022, the instant asset write-off threshold does not apply. You can immediately deduct the business portion of the asset under temporary full expensing
  • Goods can be new or second-hand
  • You can make numerous claims across many tax invoices or with multiple items on the one invoice 
  • It’s not a one-time-only offer, just so long as each purchase meets the criteria  
  • If financed, the goods must be under a specific loan type, as not all facilities are appropriate
  • Assets that fall into this scheme include vet equipment and devices, IT equipment including servers, computer and phone hardware, scanners, copiers, practice furniture, cabinetry, white goods and so on
  • All work vehicles to the extent they are used for business purposes

Is financing available? 

A common misconception is that you only get the full expensing if you pay cash for the goods. This is not true. You can borrow the funds to acquire the eligible assets and still receive the benefit. Facilities such as a chattel mortgage meet the criteria and strategies that can be considered include: 

  • Matching loan terms to the working life of the asset 
  • No repayment and low repayment terms may also be available
  • Structuring payments to match cash flow including seasonal considerations 
  • Acquiring an asset to be used for a specific work contract with options at the end of the contract to buy or hand the asset back
  • Flexibility to upgrade an asset when yours needs a change

Another factor we are hearing about is the supply of stock. With many providers relying on overseas manufacturers, placing an order as soon as possible will ensure the stock can be delivered and installed before 30 June 2023. Remember, the temporary full expensing rule is true to label, so you should look to take advantage, or you may miss out. Always speak with your accountant for specific advice about how this applies to your personal circumstances.

Come and speak to the Credabl team at the AVA Annual Conference to learn more! Or chat live on our website
www.credabl.com.au or call us anytime on 1300 27 33 22
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