Instant asset write-off for small businesses to be extended

instant asset write-off

As of 29 January 2019, the Instant Asset Write-Off Scheme will be extended to 30 June 2020 for assets purchased under $25,000.
The Instant Asset Write-Off affects small businesses with a turnover of up to $10 million a year. It allows business owners to immediately deduct assets costing up to $25,000 which can then be claimed for tax return in that income year. The Prime Minister’s announcement on 29 January stated that “businesses who go out and invest today, whether it’s a vehicle, whether it’s a piece of plant or equipment, all of it, up to $25,000, immediate write down.” However, there are certain assets that are excluded from the scheme so it is best to check with your accountant or financial advisor.
It is important to remember that the Instant Asset Write-Off Scheme reduces the tax your business has to pay, it is not a rebate. Your cash flow will still have to be sufficient enough to support the purchases.
With the ATO reporting that the average claimed amounts were at $11,000 in 2016-2017, there are concerns that the scheme is underutilised. Fewer than 350,000 small businesses have taken advantage of the scheme in the 2016-2017 year.
There is no guarantee that the Federal government will extend this scheme beyond 30 June 2020.

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