Check out our Instant Asset Write Off Checklist
Written on the 17 June 2019 by Nathan Drew, Fox Finance Group
In a pre-election promise to Australian business owners, the instant asset write-off scheme has been both increased and extended, giving business owners the opportunity to invest in their business as end of financial year draws closer.
And it's not just small businesses that can reap the rewards. Medium-sized businesses will also have access to the scheme for the first time.
So, what is the instant asset write-off scheme?
In basic terms, the instant asset write-off means businesses can instantly deduct assets rather than claiming deductions over a number of years. More importantly, for this updated version of the scheme, small businesses can claim up to $30,000 which is an increase from the previous limit of $20,000.
The revised scheme allows small businesses to spend up to $30,000 on assets to grow their business, making their taxable income lower. Meanwhile, the eligibility criteria has been expanded. Previously only businesses with less than $10 million in annual revenue could access the scheme now it's less than $50 million. This has now opened the door to much larger businesses to take advantage of this initiative.The threshold increase is in place until 30 June 2020 and will open up the scheme to an estimated additional 220,000 businesses, which takes the total number of eligible Australian businesses to 3.4 million. Now that's a lot of businesses that employ a lot of people, so that's great news for everyday Australians. Why? Because if the business owners use this initiative to help grow their business, this will create job certainty and future opportunities for everyone already employed there.
This initiative is designed to stimulate small business growth and investment as owners invest in their respective businesses in the coming months.
What type of business assets can I write off?
Under the instant asset write off scheme, you can claim any asset that relates to your business, such as office equipment, vehicles, tools and electronics. The claim can be made against multiple asset purchases both new and used, provided they fit certain criteria:
How do I calculate the write-off?
It's always best to speak with your Accountant about this who can then give you advice around your estimated profitability for the financial year before 30 June 2019, based on monthly earnings so far this year, and then look at potential asset upgrade opportunities within your business.
Here is our Instant Asset Write Off Checklist
Author: Nathan Drew, Fox Finance Group
About: CEO - Fox Finance Group