It’s good news for business owners leading up to tax-time this year, with the government Instant Asset Tax Write-Off increased to $30,000 from $20,000 for assets purchased after 7:30pm (AEDT) 2 April 2019. Assets purchased before this date are still eligible for the scheme for various amounts, outlined in the table below. With the scheme as it currently stands marked to end on the 30 June 2020, it’s a great time to take advantage of the limit increase before the end of this financial year.
|Date range||Threshold for each asset|
|7:30pm (AEDT) 02/04/2019 to 30/06/2020||$30,000|
|29/01/2019 to before 7.30pm (AEDT) 02/04/2019||$25,000|
|7.30pm (AEST) 12/05/2015 to 28/01/2019||$20,000|
|01/01/2014 to prior to 7.30pm (AEST) 12/05/2015||$1,000|
|01/07/2012 to 31/12/2013||$6,500|
|01/07/2011 to 30/06/2012||$1,000|
The Instant Asset Write-Off Scheme allows business owners to write-off individual assets immediately, rather than claim depreciation over the life of the asset each year. Here’s an outline of how you could effectively utilise the scheme:
- The scheme holds no limit on how many assets you can instantly deduct as long as each asset was purchased under the $30,000 limit (or the limit that applied prior to 2 April 2019). An example of this may be a courier business looking to expand its fleet. If they purchase 5 additional vans before June 30 2019 for $25,000 each, they would be able to claim each one through the scheme in their upcoming return.
- Like the idea of utilising the scheme, but are lacking the upfront cash? Not only can a business loan enable you to make your purchase in time to claim the asset this financial year, you can also claim the interest over the life of your loan. You are also able to pre-pay your interest up to 12 months in advance and claim this financial year, like other business expenses such as insurance, lease payments, subscriptions etc. FundingPro can help you find your ideal loan from 70+ lenders, from the big four to specialised lenders, here.
- Remember, business and personal usage percentages still apply. For example, if you purchased a new phone and use it for 60% business and 40% personal, you would only be able to claim the 60% for business use.
- Likewise, GST also still applies, so the cost of your item including GST needs to be under the write-off limit applicable to when your asset was bought.
Not only is the scheme putting money back in small business’ pockets faster, it is also an opportunity for businesses to purchase more growth-driving assets with the knowledge they can claim them in their entirety at once. Chat to your accountant or financial advisor about ways you can utilise the scheme for your business, or apply now to talk business loans with a FundingPro specialist.