Tax & Accounting

Yes — all equipment finance products available through EquipPay have tax-deductible components. However, the way the deduction is applied differs significantly by product type:

• Chattel Mortgage: You own the asset, so you can depreciate it per ATO schedules and claim the interest component of repayments as a tax deduction. You cannot claim the principal repayment.
• Finance Lease: The full lease payment is generally 100% deductible as a business operating expense — because you don't own the asset, the entire payment is treated as an expense rather than a capital repayment.
• Commercial Hire Purchase (CHP): The interest component is deductible, and the asset can be depreciated. Similar to Chattel Mortgage in tax treatment, but with different accounting implications depending on your method.
• Operating Lease: Full lease payments are typically deductible as an operating expense — fully off-balance-sheet for most businesses.

The most tax-advantageous product for your business depends on your accounting method (cash vs. accruals), your business structure, your turnover, and your specific tax position. We strongly recommend consulting your accountant before selecting a finance product — the differences in deductibility can have a meaningful impact on your tax payable.

Your accounting method — cash basis or accruals basis — affects how and when you recognise income and expenses, which in turn affects which finance product delivers the most efficient tax outcome:

• Cash accounting (common for sole traders and smaller businesses): A Chattel Mortgage is often preferred. You can claim the full GST on the purchase price upfront in your next BAS, and depreciate the asset in the year it is first used. This aligns well with cash-based recognition of expenses.
• Accruals accounting (common for companies and larger businesses): A Finance Lease or CHP may suit better. These products allow you to match expense recognition to the timing of payments, which aligns with the accruals principle of matching income and expenses to the period they relate to.

Neither method is inherently better — different finance products just align better with different accounting approaches. Your accountant will be able to model the tax impact of each option based on your specific financial year and position.

Yes — the impact on your balance sheet varies significantly by product:

• Chattel Mortgage and CHP: The asset appears on your balance sheet (because you own or are in the process of acquiring it), and the loan is recorded as a liability. This increases both your assets and liabilities.
• Finance Lease and Operating Lease: Traditionally treated as off-balance-sheet arrangements — the asset and liability don't appear in your accounts in the same way. However, note that accounting standard AASB 16 (effective from 2019) now requires most leases to be recognised on the balance sheet for larger entities. Check with your accountant whether this applies to your business.

Off-balance-sheet treatment can be useful for businesses with borrowing covenants (e.g., bank facilities that have debt-to-equity ratio requirements), or where investors or lenders are reviewing your financial statements. Discuss the balance sheet implications with your accountant as part of your product selection.

GST treatment depends on the finance product. Here's how each type works:

• Chattel Mortgage: You can claim the full GST on the entire purchase price in your very next BAS lodgement — exactly as you would if you had paid cash. This is one of the most significant tax advantages of the Chattel Mortgage product. The GST refund comes back quickly, improving your cash flow.
• Finance Lease / Operating Lease: GST is claimed progressively on each lease payment as it is made over the term. You don't get the full GST upfront — it's claimed in smaller amounts each BAS period.
• Commercial Hire Purchase (CHP): GST is also claimed progressively on repayments over the loan term, similar to a lease.

If your business has strong cash flow and the upfront GST refund is important, a Chattel Mortgage may be the most cash-flow-efficient option. Your accountant can model which product gives you the best GST timing outcome for your specific situation and BAS lodgement cycle.

No. GST does not apply to interest charges or financial supply components of equipment finance arrangements. Interest charged by lenders and establishment or account-keeping fees are classified as input-taxed financial supplies under Australian GST law — meaning no GST is charged on these amounts by the lender, and you cannot claim GST input tax credits on the interest or fee component.

You only pay (and claim) GST on the underlying equipment price — not on the finance charges layered on top. Your loan offer will clearly separate the asset price (GST-inclusive) from the interest and fee charges, so the GST-claimable amount is always transparent.

The Instant Asset Write-Off (IAWO) is an ATO tax measure that allows eligible businesses to immediately deduct the full cost of a qualifying asset in the income year it is first used or installed ready for use — rather than claiming the deduction gradually through depreciation over multiple years.

The IAWO can apply to equipment purchased using finance, specifically under a Chattel Mortgage. This is because with a Chattel Mortgage, you take legal ownership of the asset at the time of purchase — meaning the full purchase price is considered your expenditure in that year, even though you're paying it off over time via the finance.

Note: Finance Lease, Operating Lease, and CHP may not qualify in the same way because you don't take ownership of the asset in the traditional sense. Always confirm with your accountant which product structure qualifies for the write-off in your specific situation.

The eligibility thresholds and asset cost limits for the Instant Asset Write-Off change regularly with federal budget announcements and legislation. They have been adjusted multiple times in recent years in response to COVID-19 economic measures and subsequent budget decisions.

Because these rules change frequently, we deliberately don't state specific dollar figures here — they may be out of date by the time you read this.

For the most current eligibility requirements, visit the ATO directly:

• ato.gov.au — Instant Asset Write-Off

Your accountant can confirm whether your business qualifies based on your current-year turnover and the specific asset you're purchasing. EquipPay does not provide tax advice — please seek professional guidance before relying on the IAWO in your finance decision.

There is no universal answer — it depends entirely on your specific business situation. Here is a framework to guide the conversation with your accountant:

Once you've discussed and decided with your accountant, tell EquipPay which product you need and we'll match you to lenders on our panel who offer that specific product. You don't need to know which lender offers what — we handle that.

Yes. Once your finance is settled, you will have access to your customer portal at equippay.com.au/customer, which provides:

• Annual interest statements — showing total interest paid in each financial year, formatted for tax purposes
• Repayment history — a full record of all payments made, with principal and interest split
• Outstanding balance — current loan balance at any point in time
• Loan documents and contracts — original signed agreements for your records
• Settlement documentation — confirmation of settlement date and amount for tax timing purposes

If you need additional documentation — such as a full amortisation schedule (showing the principal/interest breakdown of every repayment over the life of the loan), a certificate of title for the asset, or any other lender-issued document — contact EquipPay's support team and we will coordinate with the lender to arrange it promptly.

All statements and documents can be downloaded in PDF format directly from the portal, ready to hand to your accountant at tax time.