The Federal Government recently announced the decision to bring forward the instant asset write-off scheme and to increase the threshold from $30,000 to $150,000. What does this mean for small businesses? Good things if you’re in need of upgrading or adding new assets for the organisation.
Small business instant asset write-off scheme
An instant asset write-off allows small businesses to claim immediate deductions (up to a limited amount) for new or second-hand plant and equipment asset purchases such as vehicles, tools and office equipment.
The initiative has been around since 2015 and is set to end 30 June 2020. The eligibility criteria and threshold have changed over this time and we recommend you check your business's eligibility.
Changes from 12 March 2020
These changes have been introduced as a means of stimulating the economy in the face of the COVID-19 pandemic.
From 12 March 2020 until 30 June 2020 the instant asset write-off:
- threshold amount for each asset is $150,000 (up from $30,000),
- eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).
Note, assets bought between 2 April 2019 until 11 March 2020 will qualify for an instant asset tax write-off of $30,000.
Take advantage before 30 June 2020
If your business falls within this threshold, we strongly recommend you talk to your accountant on how you can leverage the instant asset write-off scheme for this financial year ending 30 June 2020. Eligible assets can include PCs, Servers, Phone Systems or any other hardware you may require to keep your business running smoothly.
If you have been thinking about upgrading, now is the time to consider taking advantage of this scheme as from 1 July 2020 the instant asset write-off threshold will revert to $1,000.
For more information on the scheme visit the Australian Tax Office website.
How can Diamond IT help?