Are you familiar with the small business $20,000 instant asset write-off? Have you been utilising it? If not, you are not alone. According to a national study, businesses are still widely under-utilising this tax deduction and many do not fully understand what it entails.
The good news is that the write-off has been extended to 30 June 2018. So by securing your asset finance with us before that date, you still have time to benefit from the scheme.
How does it work?
The instant write-off scheme is meant for acquiring physical assets, such as vehicles, machinery, tools and equipment, both new and second-hand. (Read more about asset finance options in our previous blog post.) The number of assets you can claim the deduction for is not limited, but each one of them must cost less than $20.000.
If an asset is split between personal and business use, you may only write-off the business use proportion of the asset. The entire cost of the asset must, however, be less than the threshold.
Unfortunately, the word ‘instant’ does not mean instant cash back from the ATO. Instead, you will be able to reduce your taxable income and your tax payable in that financial year.
Who can claim?
The write-off is available for small business entities: sole traders, companies, partnerships and trusts. Since the small business entity threshold was increased, businesses up to $10M PA will be able to utilise the scheme.
The deduction is to be made in the year the asset was acquired and first used or installed ready for use. As the write-off allows you to claim the depreciation deductions on the life of the asset in one go up-front, you will not be able to depreciate the asset again in the subsequent tax years.
Make sure not to miss out!
Whether you need to replace equipment or upgrade the company car, contact us now not to miss the June deadline. Our friendly team will find the best funding option to meet your needs.
Get in touch!
Contact us today for a free consultation!
Note: Consult your accountant to ensure that the instant write-off is the best choice in your particular situation.