ATO extends asset write-off

Great news from the ATO!

Get your $20,000 instant asset write-off.

On 9 May 2017, the Australian Government announced an extension to the 2015-16 Budget measure  that provides an instant asset write-off provision for small business.  Businesses can immediately deduct the business portion of most assets if they cost less than $20,000.  The write-off threshold of $20,000 has been extended to 30 June 2018. The write-off provision is also now available to more business.

Small business is eligible to use simplified depreciation rules and claim the immediate deduction for the business portion of each asset (new or second hand) costing less than $20,000 if:

  • the business has a turnover less than $10 million (this has increased from $2 million), and
  • the asset was first used or installed ready for use in the 2016-17 income year.

This deduction can be used for each new or second-hand asset that costs less than $20,000, in the year the asset was first used or installed ready for use.  Assets that cost $20,000 or more can’t be immediately deducted. (They will continue to be deducted over time.)

According to Smart Company, small business minister Michael McCormack called for the measure to be extended for at least another 12 months, saying the policy has “been excellent for small business”.  Having witnessed firsthand the benefit the write-off can bring to business, McCormack says many small businesses that are using the tax write-off to improve their businesses are investing in income-producing assets from new utes for tradies to upgraded computers, printer and copiers, and business phone systems for offices, as well as shopfront fit-out assets – air conditioners, signs, furniture and fittings.  McCormack went onto reflect on the importance of the government encouraging business expansion and the creation of new jobs, despite a challenging budget environment.

Indeed, the evidence shows that the small business instant asset write-off measure has been embraced by small business.  Since its introduction, there was found to be an 126% increase in the number of small businesses making claims under the write-off scheme in its first six months of operation between July and December 2015, according to Treasury data released in December 2015.

 

What does this mean for your business?

If you have been thinking about purchasing assets under $20,000, this may be the perfect opportunity to purchase them and take advantage of this incentive. Tax incentives are great news for small businesses!   As always, getting advice from an accountant and tax advisor can help you determine if this is buying smart for your business.

Complete one of our short request-for-quotation forms today to be connected with our reputable vendors who are committed to promptly providing your business with a competitive price quote and answering any questions you may.  By comparing quotes from multiple vendors, you’ll know that you’re not only getting the best deal, but you’re able to make the choice that best suits your requirements.  Corporate Quotes Australia helps you buy smart! From stationary to capital equipment and professional services, our vendors can supply virtually everything you need to run your business.