Business owners looking to buy assets worth less than $30,000 can instantly write it off and save themselves cash this tax season.
If you are considering using this tax break before the end of this financial year, it’s important that you understand exactly how it works.
What Is The Instant Asset Write-Off?
It is a deduction limit which allows small businesses to instantly write off any asset purchased with a value of less than $20,000, excluding GST.
This means that instead of depreciating an asset over time and claiming part of the original expense over multiple years, business owners can claim the entire expense in the financial year in which the asset was purchased.
The scheme allows businesses with a turnover of less than 10 million in turnover to write-off an asset worth less than 30 thousand in their tax return for that year.
This is an increase on the 2017-2018 initiative of $20,000.
What Does The Instant Asset Write-Off Mean For Me?
If you are a small business, you can claim an instant write-off for any single asset that cost less than $30,000.
It means that you save on tax, as you can claim the whole expense in one financial year, thereby lowering your taxable income.
“Businesses can go out and invest today, whether it’s a vehicle, a piece of plant or equipment, all of it, up to $30,000, immediate write-down” - Scott Morrison
What Can I Claim?
- Vehicles such as trucks, vans & farm equipment
- Furniture, carpet & installations
- Tools, whiteware, & work equipment
- Computers, electronics & cellphones
- Any business asset worth less than 30K
Am I Eligible?
- I’m a small business as recognised by the ATO
- I have bought an asset that cost less than 30K
- I have or will purchase this asset the year of the claim
How Do I Claim The Asset Write-Off?
If you purchase an asset under $30,000 for your business this tax year, you may be eligible to make a claim. For more information, visit the Australian Tax Office website.
Want Finance To Purchase An Asset?
If you want to make the most of the instant asset write-off this tax year, but need financing, we can help.
We can help you compare over 70 lenders, and 100’s of loan products so you can find the right loan for your asset purchase.
Share This With Your Friends
If you haven’t been making the most of the instant asset write-off you’re not alone. A massive 78% of small businesses in 2017 didn’t use this government scheme.
According to the ATO, the average amount claimed in 2016-17 was just $11,000. And an American Express survey data from 2018 showed that just 53% of SME’s have even heard of the government initiative.
There is no reason these numbers should be so low. As a business owner, the write-off could help you update your equipment, save money, and help you keep your business operating smoothly.
Jacob leads the Working Capital team at Valiant. He is the go to guru for assisting small business owners with their everyday business finance needs.