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Take advantage of the SME instant-asset tax write off 

The instant asset tax write-off for small businesses was increased to $25,000 per asset during 2019. In the 2019 Budget, the Federal Government announced further plans to increase the instant-asset tax write off for small businesses to $30,000 per asset and, if they are re-elected on May 18, extend the plan until June 30, 2020.

How does it work?

Small businesses can currently purchase an eligible asset up to $25,000 (ex GST) and write it off as a tax deduction in the same financial year of purchase. What’s even better, is that the tax write-off could apply to more than one new asset.

In the past, only assets valued up to $1,000 (ex GST) could be written off in this way. Tax deductions for more expensive business assets are usually based on depreciation and small business owners claim this expense in their business tax return over time.

To find out more about the different methods of depreciating business assets, or claiming the instant-asset tax write-off, visit the ATO website.

What are the rules?

A small business can currently claim an immediate tax deduction for the business portion of each asset purchased in the 2018/19 financial year provided:

  • the asset costs less than $25,000 (ex GST) and was purchased in 2019
  • the business has an aggregated group turnover of less than $10 million
  • the asset was first used or installed in the year of claim
  • the asset can be new or used
  • there is no limit on the number of individual assets that can be claimed via the instant asset write-off scheme as long as each asset costs $25,000 (ex GST) or less.

Good news for small businesses

As promised by Scott Morrison in his Budget speech, if the Coalition Government is re-elected on May 18, the instant-asset tax write-off for small business will continue until at least June 30, 2020.   

In the meantime, if you own a small business, there’s still plenty of time to take advantage of the scheme in the 2018/19 tax year.

How can this benefit your business?

The write-off currently applies to vehicles, equipment, technology, machinery and any other business-related purchases under the $25,000 threshold.

We have access to highly competitive finance options if you need funds to make any business purchases before the cut-off date of June 30, 2019. 

Please call us on 8004 2222 or email hello@how-strategygroup.com.au

This information should not be considered tax or financial advice and is not intended to replace consultation with a qualified accountant, broker and/or financial advisor. 

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