In positive news for business owners, the government has extended its boosted instant asset write-off scheme until 31 December 2020.
“If you've purchased or are planning to purchase assets for your business, you may be eligible to claim an immediate deduction for assets less than $150,000,” the government announced last month.
According to the Australian Taxation Office, instant asset write-off enables "eligible businesses to claim an immediate deduction for their business portion of the cost of an asset in the year the asset is first used, or installed ready for use."
This year the government raised the asset threshold of each asset to $150,000 - this was previously $30,000. Eligibility was also expanded to cover businesses with an aggregated turnover of less than $500 million - previously $50 million.
The scheme can be used for multiple assets (only if the cost of each individual asset is less than the threshold), as well as new and second-hand assets.
The ATO has also provided a list of assets which are excluded from instant asset write-off. These are depreciating assets and include:
assets that are leased out, or expected to be leased out, for more than 50% of the time on a depreciating asset lease
assets you allocated to a low-value assets (pool) before using the simplified depreciation rules
software allocated to a software development pool
A business’s eligibility for instant asset write-off is assessed based on aggregated turnover, the date of asset purchase, when it was first used and the cost of the asset.
The scheme is not applicable to businesses with an aggregated turnover of $500 million or more.
The expanded scheme is an initiative to support small businesses affected by the pandemic.
New figures released by the Australian Bureau of Statistics have revealed that “Two thirds of businesses reported a decrease compared to last year. Of those businesses, more than three in every ten estimated that revenue had fallen by more than 50 per cent.”
Not sure if your business is eligible or just need help documenting your assets for claim? As your finance broker, we can help you through the process and ensure you are accessing the full benefits available to you. Contact us today.
Original post by Bank of Queensland