Great news for small business owners: the federal government has extended the $150,000 instant asset write-off to 31 December 2020, but you’ll need to act asap if you want to make use of the scheme this financial year.
A few months back, just as coronavirus was ramping up in Australia, the federal government increased the instant asset write-off threshold from $30,000 to a staggering $150,000 as part of its economic stimulus package.
Under the expanded scheme, businesses with an annual turnover of less than $500 million can immediately write off the cost of new or second-hand assets such as food vans, tools, equipment and – thanks to the recent threshold increase – heavier vehicles such as trucks, tractors, and machinery.
Better yet, the threshold applies on a per asset basis, so eligible businesses can immediately write off multiple assets.
Why the extension?
Under the scheme, an asset must be installed and ready to use by the deadline (previously June 30) in order to be eligible.
So, by giving a six-month extension (to December 31) the government is giving under-the-pump businesses around the country “additional time to acquire and install assets” – which essentially means a little more breathing room.
There’s still time this financial year
All that said, there’s still time to make the most of the scheme this financial year.
By doing so, you can immediately claim all the tax deductions you would have claimed over the life of the asset.
This can help with your business’s cash flow, as getting the cash back sooner means you can re-inject it straight back into other parts of your business.
So if you’d like help obtaining finance before the June 30 EOFY deadline, please get in touch.
We can present you with financing options for the instant asset write-off scheme that are well suited to your business’s needs now, and into the future.