Make the most of the instant asset tax write-off

Earlier in the year the Australian Government announced a package of measures to help protect the economy against the economic impact of coronavirus.

Last Updated 27 May 2021

The 2021-22 Federal Budget has announced last year's business write-off perks being extended by another 12 months.

That’s great news for your small business! It’s a supersized extension of the $150,000 instant asset write off, which was scheduled to end on 31 December 2020.  It means you can invest in new equipment to boost productivity or explore new product lines, while pocketing valuable savings on tax. Even better, it’s an opportunity to take advantage of super-low interest rates on business loans to fund new equipment.

The Instant Asset Write-Off extension, dubbed Temporary Full Expensing, allows an immediate deduction for purchases of new eligible depreciating assets (for businesses with an aggregated turnover under $5 billion), eligible second-hand assets (for businesses with aggregated turnover under $50 million), and the balance of a small business pool at the end of each income year in the period (for businesses with an aggregated turnover under $10 million).1

When it comes to financing your business needs, give your local Mortgage Choice broker a call today.

Earlier in 2020, the Australian Government announced a package of measures to help protect the economy against the economic impact of coronavirus.

One of these measures was the Government's significant increase to the maximum instant asset write-off amount for small and medium businesses - and it is a huge plus for businesses looking to purchase big-ticket items.

The Government increased the instant asset write-off threshold from $30,000 to $150,000 and expanded  access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).2

However, in the 2020-21 Federal Budget it was announced that from 6 October 2020 until 30 June 2021, businesses with turnover of up to $5 billion will be able to immediately write off on tax the full value of any eligible asset purchased for the business.

And, the Federal Government announced, in the 21/22 Budget, an extension of the write-off by another 12 months.

Eligibility to use instant asset write-off depends on3:

  • your aggregated turnover (the total ordinary income of your business and that of any associated businesses)
  • the date you purchased the asset
  • when the asset was first used or installed ready for use
  • the cost of each asset being less than the threshold. Read more about the Instant asset write-off thresholds here.

The criteria have changed over time so make sure you check whether your business is eligible. Read more about the eligibility criteria here.

For the most up to date and latest information on the instant asset tax write-off  be sure to visit ATO.gov.au.

When it comes to financing your business needs, Give your local Mortgage Choice broker a call today. They can help you navigate through the lending and asset finance options to find a solution that meets your unique business needs.  

Your local Mortgage Choice expert

or

Posted in: Small business