The instant asset write-off means eligible businesses can claim an immediate tax deduction for the cost of purchasing new or second-hand assets up to the amount of $150,000. This can include vehicles, tools, machinery and office equipment. These assets must be installed and ready for use by the end of the financial year, to claim the deduction in that year. To be eligible, a business must have an aggregated annual turnover of less than $500 million.
Prior to this week’s announcement the scheme was set to reduce substantially from 1 July 2020, only allowing assets worth less than $1,000 to be written off by businesses earning less than $10 million per year. Without the instant asset write-off scheme boost, businesses would have to claim deductions for depreciation of their assets over a number of years.
You can claim this deduction through your tax return in the year the asset is first used or installed ready for use. The scheme is available whether you operate your business as a sole trader, partnership, company or trust.
Some other points of note:
Do you have questions about the instant asset write-off and the best strategy to purchase your assets? If you need a trusted accountant please talk with us about your situation and find out if we’re the right fit for you. Our team at BLG Business Advisers are here to assist you.