In March 2020, the Government increased the value that a business could instantly write off a business asset to $150,000 from $30,000 as part of it’s response to Covid -19.
The business needed to have a turnover of less than $10 Million.
Currently the Government has boosted this scheme and says there is now no limit on asset value if the turnover is less than $5 billion.
From 6 October 2020, over 99 percent of businesses will therefore be able to write off the full value of any eligible asset they purchase for their business as announced by treasurer Josh Frydenberg in his budget speech.
Examples of what can be written off
- A trucking company will be able to upgrade its fleet
- A farmer will be able to purchase a new harvester
- A food manufacturing business will be able to expand its production line
Other eligible assets include computers, tablets, tools for use on a work site such as drills, ladders, tool boxes, equipment like a fridge or a grill, phones, point of sale systems, or anything else that is used in the running of a business.
The cost of improvements to existing eligible depreciable assets made during this period can also be deducted in full.
Passenger motor vehicles are not part of this scheme.
From 6 October 2020 until 30 June 2022 any eligible new or second-hand assets can be written off in full if used or installed and ready for use by 30 June 2022. The turnover must be less than $5 billion.
So if an asset is bought 27 June 2022 and only ready for use 3 July 2022, then this asset cannot be claimed in full for the 2022 tax year.
Should you have any questions specific to your business, contact us at firstname.lastname@example.org or ph Accolade Accounting on 08 6263 4466.