Small Business Win!
Following the 2019/20 Federal Budget announcement, the Government has announced an additional boost to the Instant Asset Write Off, increasing the threshold even more, to $30,000 - for assets "first used or installed, ready to use" between April 3rd, 2019 and June 30, 2020.
Deductions are typically available for purchases that are made by your business, for your business. The purpose of the $30,000 Instant Asset Write Off is to accelerate the speed at which you can make deductions for those purchases.
Since the commencement of the scheme, small businesses (with an annual turnover of less than $10 million) have been able to instantly deduct business assets that cost $30,000 or less. This allows business owners to claim a deduction for that asset in the same income year as the asset was purchased. This deduction is then able to be claimed on the business’s tax return for that income year.
An instant asset write-off allows small businesses to claim immediate deductions (up to a limited amount) for new or second-hand plant and equipment asset purchases such as vehicles, tools and office equipment. The assets must first be used, or installed for use, in the income year you’re claiming for.
The threshold has increased to $30,000, and has been extended to 30 June 2020.
Businesses with a turnover of up to $10 million can also claim a deduction for each asset purchased and first used or installed ready for use, up to the following thresholds:
- $30,000, from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020
- $25,000, from 29 January 2019 until before 7.30pm (AEDT) on 2 April 2019
- $20,000, before 29 January 2019.
Your business clients can't immediately claim a deduction for individual assets that cost $30,000 or more. They can continue to deduct these over time using the small business pool or the general depreciation rules, depending on their turnover.
Penrith Toyota does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The information provided on this website is general in nature only and does not constitute personal or commercial financial or taxation advice. The information has been prepared based on our interpretation of the IAWO program and has not taken into consideration your personal or business objectives, financial situations or needs. Before acting on any information on this website, or others, you should consider the appropriateness of the information with regard to your personal or business objectives, financial situations or needs. Speak to your Accountant, Tax Advisor or the Australian Tax Office for any questions you may have with regard to the application of the Instant Asset Write Off for your business.