The Australian Government has been helpful in the Covid19 crises, and so far announced multiple packages on how to help SME businesses.
One of them is an instant $150k Asset Write Off which came into effect in March and has been extended until 31st December 2020.
What is an instant asset write off?
According to the ATO, an instant asset write off is an immediate write off of each asset that costs less than the threshold. Businesses can now claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use.
How does it work?
If your business’ annual turnover is less than $500 million, you are eligible to claim immediate deductions up to an amount of $150,000 for any new or second-hand plant and equipment assets purchases. That means you can purchase any equipment, any vehicle or material for your company that will help you to recover from the current situation or improve your business in the future. Don’t forget if you wish to claim an immediate portion from your purchased asset this is only allowed in the year the asset is first used or installed ready for use.
A humble note, is that if you are planning on purchasing a motor vehicle, the depreciation limit is $59,136, cars over this value are deemed by the ATO to be a luxury vehicle.
Is my business eligible?
Before you make any new purchases, we would suggest checking out assets that are excluded from the government lists such as horticultural plants or simply contact us and we can assist you.
Remember we don’t charge for quick 5 minute phone calls and we encourage all of our clients to take advantage of this.
It’s important to always align your strategy with your established business plan.
How do I apply for the instant asset write-off?
Here at QC Accountants, we are ready to help you with additional details and also help you to claim the business portion of the asset’s use in your tax return for the particular financial year.
If you have any questions at all, do not hesitate to contact our team of professionals on 07 5593 6060 as we are here to help you.