Your business is a not just a livelihood. It’s also a powerful asset, and investing in your business can make it even stronger. It can also provide tax savings with the newly upgraded instant asset write-off.
How does the write-off work?
The instant asset write-off has been with us for a few years now, and in a post-budget blitz, the scheme’s upper limit has been extended to $30,000, up from $25,000.
Even better, the write-off has also been extended to medium-sized businesses with a turnover of less than $50 million
The beauty of the scheme is that it allows small (and now medium-sized) businesses to claim an immediate tax deduction for eligible asset purchases rather than having to depreciate the cost over several years. This delivers immediate tax savings that can make an asset purchase more manageable on business cashflow.
What type of assets can be written off?
Most types of plant and equipment used in your business can be eligible for the instant tax write off. A new printer, a cappuccino machine, a tradie’s ute or a hairdresser’s reception desk are just some of the assets that can be claimed.
What’s the write-off worth?
This year sees three thresholds apply to the instant write-off depending on when you purchased a business asset.
The upper limits are:
- $20,000 for assets purchased between 1 July 2018 and 28 January 2019
- $25,000 for assets purchased between 29 January 2019 and 2 April 2019
- $30,000 for assets purchased between 2 April 2019 and 30 June 2020.
A key point is that the entire cost of the asset must be below the instant asset write-off threshold irrespective of any trade-in amount1. So, if you buy a delivery van priced at say $40,000, it won’t be eligible for the write-off even if you pay $25,000 after trading in your current vehicle for $15,000. The van would have to be priced below $30,000 before any trade-in applies for it to be eligible for the write-off.
Don’t miss out
Over 370,000 small businesses have reaped the rewards of the instant asset write-off already. And an estimated 3.4 million businesses stand to benefit from the new rules.
Upgrading your business assets, improving your equipment or adding new plant to your business can all improve the productivity, operating expenses, revenue generating capacity and the customer service value of your enterprise.
Quite simply, investing in your business assets can help your business reach its full potential sooner – with the added appeal of instant tax savings.