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The Government has announced significant changes to the Instant Asset Write-off scheme that has been in place since the start of March 2020. This scheme was limited to businesses with aggregated turnover less than $500 million and only for assets costing up to $150,000. The scheme was due to expire on 31 December 2020.
From last night’s budget announcement, the instant asset write-off has been updated and extended. The main aspects of this write off provides for:
- An immediate write-off of new, eligible assets purchased after 6 October 2020 and first used or installed by 30 June 2022
- No limitation in asset value (updated from $150,000 limit)
This is a significant enhancement to the current program which has been designed to encourage business spending on assets and projects. However, the measures are limited to depreciating assets only and therefore will not apply to other capital works.
Some other updates include the costs of improvements to existing eligible assets being fully deductible. For most of our small business, full deductions will also apply to second-hand assets.
To help businesses access the scheme already in place, the government has added another six months to the eligibility under this scheme by allowing the write-off for assets first used or installed by 30 June 2021 (previously December 2020.
Tax and tax planning can be a complicated and evolving process – it’s important to have an accounting partner who knows the game, is across all legislation and understands your situation and what you want to achieve. If you would like to know more about our tax planning services and how you could reduce your tax exposure, please call our office on (08) 8172 1444 or email our friendly team.