2022 has been full of challenges for business in general with inflationary pressures, tightness in the labour market, interest rates rising and for many, dealing with the impacts of devastating floods. While dealing with those many challenges it can be understandable that many other issues may be put on the back burner or overlooked. This general business finance article updates on deadlines for Director IDs and a key tax benefit, latest on interest rates and details for those impacted by recent floods.
Director Identification Number Deadline Looms
We recently posted a detailed article on Director Identification Numbers but with the deadline a week away, it’s worth another reminder as the penalties for those that do not comply can be sever. This ASIC regulation requires all directors of companies (there are some exclusions) to have an individual and unique identification number.
Existing directors of companies must have their Director ID by the deadline of 30 November 2022. The process is a simple, online procedure on the Australian Business Registry Service
website and involves providing certain information about the individual in line with details on file with the ATO. You need a MyGovID which is an app, to start the process. The details are all laid out on the ABRS website so get moving and get this done if it applies to you.
Key Tax Measure Coming to an End
When it was first announced, Instant Asset Write-off which then morphed into temporary full expensing
, was widely pushed by Government, motor vehicle and equipment dealers and lenders including Jade Finance. And rightly so as this accelerated asset depreciation measure presents a very attractive tax benefit to eligible businesses acquiring eligible assets.
But it does have a timeframe and that timeframe is quickly closing. The measure is only available for assets purchased and operational in the business prior to 30 June 2023. With floods, supply chains and labour issues taking priority at the moment, the end of financial year may seem a lifetime away. But we remind business operators that there can be significant delays in delivery times for motor vehicles and some machinery and equipment.
Holding off purchasing decisions until closer to June next year, may mean delivery after 30 June and hence missing out on utilising temporary full expensing. We note the reports that a significant number of vehicles sold in October were to buyers that had place pre-orders. Wait times for some popular models can be up to and beyond 6 months. That timing would dovetail with having the assets/cars in the business by 30 June 2023.
Choosing appropriate finance is critical to using temporary full expensing. Chattel Mortgage for Motor Vehicles and Chattel Mortgage for Equipment are considered most suitable.
This form of finance allows for the asset to be depreciated in line with ATO rulings and as such may be applicable for temporary full expensing. By depreciating or writing off the full purchase price of the assets, businesses reduce taxable income and may also be in line to utilise Loss Carry Back.
If of interest to your business, contact us for a quote on Chattel Mortgage for your new vehicles or equipment.
Interest Rates Outlook
It is more than ‘highly expected’, more like ‘certain’, that the RBA will once again lift the cash rate at its December Board meeting in two weeks time. But some of the remarks from Governor Lowe around easing the rate of those rises may have provided some level of optimism that the next rate rise may be smaller.
But with the latest Jobs Figures released by the Australian Bureau of Statistics
ast week, that optimism is probably diminishing. The figures reported a further 1% drop in unemployment which some media are reporting as taking some economists by surprise. The rate dropped from 3.5% to 3.4%. This is seen as the economy continuing in a strong position and as Governor Lowe has mentioned previously in regard to the current unemployment rates, people are getting jobs.
The unemployment rate is likely to trigger another 0.25% rise on 6 December, according to some analysts and economists. That would typically trigger rises across lending markets. But with business finance, some banks and non-bank lenders will vary in when they may instigate any rises. This can create a more varied rate market and a greater need for business operators to seek assistance to identify and secure the cheapest rates through brokers such as ourselves.
Advice for NSW Floods Victims & SA Storm Damage
The central west of NSW is now under a devastating flood situation and more times have been warned to be ready while in South Australia, serious storms have caused havoc across many areas. For those that have lost vehicles, machinery and equipment which are under finance as a result of these disasters, there are steps to take for assistance:-
- Direct financial support can be applied for through government channels.
- Contact the insurer and lodge the appropriate claims.
- Contact the lender to advise of the claim lodgement and where necessary, request relief on finance payments.
- Finance payments must still be met even when the goods are unusable and subject to an insurance.
- Failure to meet the repayment schedule can result in default and downgrading of the credit score.
- Finance applications to acquire new vehicles and equipment can be made prior to settlement of the insurance claim.
The Jade Finance team is ready to assist business operators source finance to replace damaged assets promptly to ensure the business is back to operational status as quickly as possible.
Contact Jade Finance 1300 000 008 for cheaper rates on business finance
DISCLAIMER: NO LIABILITY IS ACCEPTED IF ERRORS OR MISREPRESENTATIONS ARE FOUND IN THIS ARTICLE. THE ARTICLE IS PREPARED AND PRESENTED FOR GENERAL INFORMATIVE PURPOSES AND IS NOT INTENDED TO BE THE SOLE SOURCE OF INFORMATION FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING GUIDANCE AND ADVICE SHOULD CONSULT A FINANCIAL ADVISOR.