Extension to the instant asset write-off

This means that businesses with an annual turnover of less than $500 million will be able to take advantage of the extended period to purchase assets to support their business whilst restrictions begin to ease.

With businesses being able to purchase single eligible assets at a cost of less than $150,000 (ex GST), it means that they can claim an immediate deduction providing the asset is first used and installed ready for use for a taxable purpose on or after 12 March 2020 and by 31 December 2020. These assets can be new or second hand. So, for a small business, they can write off a number of assets under this scheme.

Will I Get a $150,000 Tax Refund for Each Asset?

Simply put, No. The instant asset write-off scheme simply means that a business can reduce the amount of tax that would pay (i.e. if your business is structured as a company, the most you would get back would be the current tax rate of 27.5%

Motor Vehicle Purchases

If a business purchases a motor vehicle, the instant asset write-off is limited to the business portion of the car limit being $57,781 (i.e. if the motor vehicle purchases was used 75% for business use, then you can only claim 75% of the car limit of $57,781 which would equate to $43,186).

Are All Assets Eligible?

Whilst most assets are included, there are a number of asset classes that are excluded from the scheme. These include capital work assets, horticultural assets and more. The ATO has a comprehensive list of excluded assets on their website.

It is best to speak to your Accountant or Adviser about your business situation and whether you qualify. Please contact us on 1300 204 781 for more information.