$30,000 instant asset write off for businesses

The instant asset write off threshold increased to $30,000 for assets from 2 April 2019, giving business owners the opportunity to reduce their tax liability.

This means that where a business purchases an asset (new or second hand) costing less than $30,000 and it is used or installed ready for use from 7.30pm AEDT on 2 April 2019, an immediate tax deduction can be claimed in the 30 June 2019 tax return. This will reduce the amount of tax paid by a business in the current tax year.

A few things to note:

– You may purchase and claim a deduction on multiple assets provided each asset is under the relevant threshold.
– The threshold was previously $20,000 (before 29 Jan 2019) and $25,000 (29 Jan 2019 to 2 April 2019).
– Assets that cost $30,000 or more cannot be immediately deducted. They will continue to be deducted over time using the small business pool.
– The instant asset write off has been expanded to include businesses with a turnover from $10m to less than $50m – previously it was just for businesses with a turnover of less than $10m
– The instant asset write off has been extended to 30 June 2020 and therefore businesses can take advantage of this generous break in the next tax year as well.

A quick beware: In working out the amount you can claim, you must subtract any private use proportion. Therefore business owners are advised to be reasonable with their purchases. Only purchase necessary assets that will help the business grow further because the Government may still reject deduction claims if the purchase is not found to benefit business needs.

Please see ATO link below for further information and examples.
https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/In-detail/Depreciating-assets/Simplified-depreciation—rules-and-calculations/?page=4