The $20,000 instant asset write-off is here for another year!
In the 2015 federal budget, the government raised eyebrows when it introduced the $20,000 instant asset tax write-off scheme, increased significantly from $1,000.
This scheme allows businesses to claim immediate deductions for depreciating assets worth up to $20,000 as long as the asset is purchased and installed before June 30. Initially only available to businesses with annual turnover of up to $2 million, legislation was passed earlier this year to extend the tax break to businesses with annual revenue of up to $10 million.
The popular scheme was due to expire on June 30 this year, however, the federal government used this year’s budget to extend the scheme another financial year.
Small Business Minister Michael McCormack said in the 2017 budget the 12-month extension “continues the government’s support for small businesses to pursue new ideas, invest in themselves and create more jobs”. More information on the write off can be found here.
The small business tax break remains whether you’re purchasing the asset through finance or not. That means you can go to a finance company, work out the appropriate package for you, and be enjoying your new asset sooner.
Key notes for the scheme:
- Be an eligible small business with under $2 million in annual turnover
- Choose an asset under $20,000 inc GST to ensure you maximise your tax deduction
- Organise finance before shopping to clarify your budget
You should always consult your tax advisor prior to making any decisions on purchasing an asset for your business and using such schemes, this article is intended as general information only.