$30,000 instant asset write-off!
The Government has extended the instant tax write off for small business and has also increased the threshold to $30,000. (Edit - This is now $150,000 as of 12/03/2020)
This initiative has been a great success for out clients and we hope it continues long into the future.
What does it mean for me?
Any asset you need in order to operate your business can be fully deducted up to the value of $30,000 in the year you purchase it.
Have you purchased?:
- Motor Vehicles
- Computer Equipment
- Plant & Equipment (Forklift ect)
- Trailers, Buckets, Pumps, Ute Trays
- Air Conditioners, Fridges, fit-outs
The above and much more can be fully deducted in the year it is purchased, so long as its value does not exceed $25,000.
The Fine Print
If you are registered for GST the good news is your threshold is effectively $33,000. The threshold is the EX of GST price you pay.
The instant asset writes off applies only to the asset itself and not to any additional fees and charges you may otherwise find on a contract.
Motor Vehicle Example:
You walk into a dealer and spot the car you want to buy. The salesman tells you it is a $32,000 drive away. Initially, you had wanted a car to meet the criteria of the instant asset write off and as a result, decide to search elsewhere. You may have made a mistake and below is why.
Motor Vehicle: $25,000
GST: $2,500
Insurance: $1,250
Stamp Duty: $1,850
Fees: $1,400
TOTAL: $32,000
In the above example, assuming you were registered for GST you would claim the GST on your next BAS, claim the insurance and fees on your tax return and apply the instant asset write off on the $26,850 EX of GST asset price.
For further reading on the subject check out the ATO website HERE
