Right time to buy

Current government incentives could make it the perfect time to purchase new equipment for your practice.

The past 12 months have been focussed on dealing with COVID-19, lockdowns, and the Government stimulus package. Now, as we begin to move into a post-COVID ‘normal’, many health professionals have found that they are busier than ever.

“The healthcare and dental markets have bounced back faster than almost any other industry in Australia,” says Tim Bowring, New South Wales State Manager and Head of Partnerships at BOQ Specialist. “After being closed for six weeks or more, there was a build-up in demand for medical services when practices reopened. Specialty practices, such as ophthalmology and dermatology, have seen demand go through the roof.”

With this increased demand for medical services as well as some excellent Government incentives available, now could be the perfect time to buy or upgrade equipment.

Tax incentives

While it might seem counter-intuitive to consider new equipment when your practice is so busy, now could be an excellent time to look at upgrading equipment, refreshing fit-outs and refurbishing other parts of the practice. The Federal Government is providing attractive incentives through their temporary full expensing scheme which enables business owners to purchase equipment and instantly write it off for tax purposes in the same financial year, rather than depreciating over a number of years, up until 30 June 2023. “The end date for that incentive means you have ample opportunity to consider your equipment purchases and ensure you get your required upgrades in place in time,” says Tim.

Opportunity to update

During the peak of the pandemic, health professionals took advantage of the Government stimulus package and cash boosters to keep their practices afloat. When the lockdowns eased and business was able to resume, many practices found that they were more profitable than they were previously.

“This unique situation means that by the end of the financial year, many practices may have generated additional taxable income. If this is the case for you, now could be an opportunity to consider investing in your practice and gain the resulting tax and cash-flow efficiencies,” says Tim.” One possible and timely strategy here is to invest in upgrading your practice.

 “We have a number of different packages with equipment suppliers where, for example, there might be an offer of 12 months with no interest and no repayments on a piece of equipment,” says Tim. “Combining these offers with the temporary full expensing incentive means practitioners can get their practice up and running with brand new equipment, to increase efficiency and generate cash-flow –  all while they write-off those assets and make no repayments for 12 months.”

Fast and efficient

While some practitioners choose to run equipment until the end of its life, that’s usually a false economy. Just from an operations viewpoint, getting new and better equipment means that they're going to work more effectively and efficiently.  Not only does this improve productivity of the practice, it can also increase profitability too.

“Right now, the current temporary tax incentives can really work in the practice owner’s favour,” says Tim. “Once we reach the cut-off date in 2023, any assets purchased after then must be depreciated over the life of that asset. Assets purchased and installed beforehand can be 100 per cent written off straight away.”

Fit-out or refurbish

Not only could it be a great time to purchase new equipment, but it also could be a perfect opportunity to do a complete refurbishment and fit-out of a practice. Of course, such a decision should be carefully considered and discussed with an accountant or financial advisor, but if deemed appropriate, the timing can work to your advantage.

“Under the temporary full expensing scheme, every individual qualifying asset can be claimed – there is no cap on the value or number of assets,” says Tim. “If you are fitting out a practice, you can write off the cost of the fit-out upfront. That’s an instant tax write-off.”

EOFY ahead

As we approach the end of this financial year, tax bills will soon be generated for 2021. If you are considering purchasing or upgrading equipment, current market conditions could really work to your advantage.

“We always tell our clients that the first step is to talk to their accountant,” says Tim. “They will give you sound financial advice and direction. Our financial specialists can then provide information about the different financial options available to you. We also have a number of relationships with trusted industry partners who can supply any equipment that’s required.”

The simple fact is that BOQ Specialist has supported the healthcare industry for over 30 years. “We work closely with medical, dental and veterinary professionals,” says Tim. “BOQ Specialist’s deep understanding of the industry has really allowed us to develop a product suite that is tailored to the needs of our clients so we are well positioned to help with all their financial needs.”

 

To find out more ways we can help you at the end of the financial year, contact one of our financial specialists today on 1300 160 160 or take a look at our EOFY offer here.

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      The issuer and credit provider of these products and services is BOQ Specialist – a division of Bank of Queensland Limited ABN 32 009 656 740 AFSL and Australian credit licence no. 244616 (“BOQ Specialist”). Terms, conditions, fees, charges, eligibility and lending criteria apply. Any information is of a general nature only. We have not taken into account your objectives, financial situation, or needs when preparing it. Before acting on this information, you should consider if it is appropriate for your situation. BOQ Specialist is not offering financial, tax or legal advice. You should obtain independent financial, tax and legal advice as appropriate.