New tax write-off rules explained

2 minute read before buying business asset

Recent federal budget offers small and medium sized businesses a welcome expansion of the instant asset tax write off scheme. With the end of the financial year approaching, now is the time for small businesses to plan how to make the most of the new write-off rules. Here’s a quick rundown on the latest facts and figures. 

An instant asset write-off allows SMEs to claim immediate deductions for new or second-hand business asset purchases such as vehicles, tools and office equipment.

Thanks to the latest changes, the scheme will now apply to capital assets purchases costing up to $30,000 per asset.

There is no cap on how many times a business can use this deduction. So you could potentially purchase any number of assets for your business and instantly deduct them all, as long as all the terms and conditions are met. Small business owners may even purchase assets that are used for both business and personal use, in which case you will only claim the business portion.

In order for your business to benefit from the new write-off rule, the date of the purchase is critical. New threshold only applies to assets acquired after 2 April 2019 by medium sized businesses. To be eligible to write off your new assets, they must be either installed and in-use, or purchased and ready for use in the same financial year as it was purchased. As of now, the cut-off time for the latest threshold change is June 30, 2020 after which there is a chance it will return to its original level.

Considering making use of this tax deduction? For more information on the instant write off and the full list of exclusions, visit ATO website.

Key Figures:

• Date of effect: from 2 April 2019 to 30 June 2020.
• New threshold for the instant write-off: $30,000
• Available for small (turnover under $10M) and medium sized businesses (turnover $10-50M). 

Check out our short-video about the new tax write-off rules and get your asset loan pre-approved with Prosper Finance. To discuss your asset finance options in more detail, feel free to call us: 02 8971 4756 or send an email to info@prosperfinance.com