The federal treasurer has announced the extension of the instant asset write-off scheme to 31 December 2020 in response to the COVID-19 pandemic. This allows a business with a turnover of less than $500 million to deduct the cost of a depreciating asset. The threshold amount for each asset has increased from $30,000 to $150,000.
The criteria for your business’s eligibility for the instant asset write-off are as follows:
> aggregated turnover of less than $500 million
> the asset is purchased the same year it’s claimed
> asset is first used or installed, ready to use from 12 March 2020 to 31 December 2020
> the asset cost is less than the $150,000 threshold
These new measures assist small businesses as they aim to help improve cash-flow by bringing forward tax deductions for assets purchased. There is no limit to the number of assets you can buy and qualify for the write-off as long as the total price of each asset is under $150,000.
After 1 January 2021, the instant asset write-off threshold for depreciating assets will collapse to $1,000. It will be eligible only to small businesses with an aggregated turnover of less than $10 million.
For more information see the ATO’s official webpage on the extension of the instant asset write-off: https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/
Don’t hesitate to contact our team today should you require further information.