In response to the economic impact of the Coronavirus – the federal government has just announced a new and improved instant asset write-off initiative which is even bigger and better than last financial year.
Business owners looking to buy assets worth less than $150,000 can now instantly write them off and save themselves cash this tax season.
This means from the 12th of March 2020 and up to the 30th June 2020 – If you are considering buying a business asset you may be eligible to write it off this tax year. It’s important that you understand how it all works to take advantage of it.
What is the instant asset write off?
It is a deduction that small and medium businesses use to can instantly write off assets purchased up to a set value – which has just been increased to $150,000, excluding GST.
What this means is that instead of depreciating the asset over time and claiming part of the original expense over multiple years, owners can now claim the entire expense in the financial year in which the asset was purchased.
The scheme was introduced by the federal government originally back in 2017-18 and has changed over the last few years in terms of who just who is eligible and what dollar amount can be claimed.
What has changed and what does it mean to your business?
There are two main changes to the new instant asset write off the government has introduced to stimulate the economy.
- Businesses that are eligible – Businesses with an annual turnover of up to $500 million are now eligible to claim the instant asset write off. Previously it was only available to business with a turnover of up to $50 million.
- The amount you can write off – Assets up to the value of $150,000 ex GST can now be depreciated immediately under the new scheme which has been increased from the $30,000 offered last year.
If you are a small or medium business you can claim an instant write off for any single business asset less than $150,000 excluding GST. The threshold applies to both new and used equipment and applies on a per asset basis, so eligible businesses can immediately write‑off multiple assets.
This means that you save on tax as you can claim the whole expense in that financial year, in turn, lowering your taxable income.
“We will supercharge the instant asset write off so businesses can immediately make new purchases of up to $150,000 and reap the rewards ” – Scott Morrison
What assets can be written off?
Some examples of assets that qualify are
- Vehicles such as trucks, vans & farm equipment
- Furniture, carpet & installations
- Tools, white ware & work equipment
- Computers, electronics & cell phones
- Any business asset worth less than $150K
Check out the assets we can help finance
Not all business use assets can be written off for a full list of excluded items please click the link of items ATO has excluded from the scheme
What do I do now?
First of all check if your eligible to claim the instant asset write off. Below are some of the key things to look at:
- You are small business as recognized by the ATO
- Have bought a business use asset less than $150K
- You have purchased or will purchase the asset before end of financial year
To find more information about the instant asset write off and the changes you can review the government business website or speak with your accountant who can assist you with this.
We can help with finance.
For most businesses $150k is still potentially a large investment from a cashflow point of view. If you need assistance with finance to take advantage and purchase these assets then the team at FinanceBeagle are ready to help with all your finance requirements. We have access to over 30 different lenders and we are confident that we will find a loan that suits your specific needs / circumstances. We do all the legwork for you to ensure you get the best deal and can take advantage of this great initiative.
Get in contact with the FinanceBeagle team today on 1300 225 525 for an obligation free chat about your finance needs.
