One of the best tax breaks for many businesses is the current $150,000 Instant Asset Write-Off, which offers small-medium businesses a means to acquire capital assets and obtain an immediate tax deduction.
The federal government introduced the temporary full expensing scheme in March of 2020, with the incentive to allow businesses with a turnover or income of less than $5 billion to immediately write-off the cost of assets they first use or install by June 30, 2021. Since then, the government has announced an extension on the write-off until June 30, 2023. This is a significant expansion of the previous instant asset write-off scheme, and allows for all eligible assets to be written off immediately, with no cap on the value of new assets that can be claimed.
Alexi Boyd, chief executive of the Council of Small Business Organisations Australia (COSBOA), told SmartCompany the scheme has been a “real saving grace” for small businesses. “Not only does it remove the complexity behind depreciating an item, it encourages small businesses to invest in their business for the future,” Boyd says.
So, let’s break it down for you:
What do you get?
· An asset write-off of up to $150,000.
Who is this for?
- Eligible businesses with an aggregated turnover of less than $500 million.
Assets must:
- Cost less than the instant asset write-off threshold.
- Be purchased and used in the year the write-off is claimed.
How do you apply?
- There is no application required. The write-off is applied when you lodge your tax for the relevant year.
You can find out more about eligibility and apply for the Instant Asset Write-Off Scheme here.
As always, Vanrooy is here to assist with all of your equipment needs. If you’d like to have a chat, you can contact us here.
This will be your last chance to use the write-off scheme before it’s gone, so get in quick!
