Due to COVID-19, the Australian Government has updated the parameters surrounding the instant asset write-off scheme to encourage businesses to invest in equipment to stimulate the economy and create jobs. We have put together a summary on how this new initiative might affect your business and how you can benefit.
What’s changed?
Under changes announced in the latest budget, firms with turnover of up to $5 billion can now access the instant asset write-off scheme to deduct the full cost of eligible capital assets (up from the previous $500 million).
Firms reporting a turnover of up to $5 billion can now access the instant asset write-off scheme to deduct the full cost of eligible capital assets (up from the previous $500 million). This now includes companies that make more than $5 billion in revenue, but less than that amount in Australia. 3
Under the new rules, assets must be acquired after Tuesday 6 October and be first used before 30 June 2022. Assets included in the existing depreciation rules cover things like tech equipment including computers and monitors, printers and scanners as well as office furniture.
While the full expensing plan applies to new depreciable assets and the cost of improvements to existing eligible assets, second-hand assets purchased by small and medium sized businesses are also covered.
For businesses with an annual turnover of between $50 million and $500 million, the cost of eligible second-hand assets costing less than $150,000 can still be deducted as long as those purchases are made by the end of the year. Businesses that hold assets eligible for the enhanced $150,000 instant asset write-off will have an extra six months, until 30 June 2021, to first use or install those assets.
Using the instant asset write-off
Now may be the time to invest in products your workplace needs to run smoothly. Speak to your Account Manager to find out more about how Winc can support your organisation’s needs. To explore our full range of products, visit our website here.
Disclaimer: This is general information only and does not constitute professional advice. This information does not take into account your objectives or financial situation. This information is correct at the time of publication. Please seek professional legal advice, financial advice or taxation advice from a tax specialist to discuss your business’ eligibility to claim deductions on any purchases.
References:
1Keating, E., 2020, ‘Budget 2020: Businesses to fully write-off all assets purchased and used before June 2022’, <https://www.smartcompany.com.au/budget-2020/businesses-write-off-full-value-new-assets/>
2Keating, E., 2020, ‘Explained: How SMEs can access the new ‘limitless’ asset write-off scheme’, <https://www.smartcompany.com.au/budget-2020/explained-smes-access-asset-write-off-scheme/>
3McIlroy, T., 2020, ‘More big companies to get capex tax break’, <https://www.afr.com/politics/federal/more-big-companies-to-get-capex-tax-break-20201122-p56gu5>
