This year looks likely to be the last chance for small businesses to take advantage of the Federal Government’s $20,000 instant asset write-off. So any business with an annual turnover of less than $10 million has until 30th June 2018 to make a qualifying investment.
The scheme originated in the May 2015 budget as part of the Growing Jobs and Small Business package presented by Joe Hockey. Since then, it has allowed companies to write off asset investments up to $20,000 in a single go, rather than deducting them over time.
The scheme has been extended in successive budgets, including 2017, when the definition of a small business was extended to cover companies with turnover up to $10 million (formerly $2 million).
This year, the scheme applies to almost any asset acquired before 30th June 2018 (both new and second-hand), including industrial equipment, vehicles, tools and electronics.
And, in the case of expenses such as a website, some parts are considered capital assets and can be written off under the $20,000 tax break. However, in-house software is specifically excluded.
There is also no limit to how many assets for which the deduction can be claimed. However, each one must cost less than $20,000.
From 1st July this year, the asset limit will revert to $1000… unless, of course, it is extended for another year.
We’ll be reminding all our readers of the impending deadline as it draws nearer. And the April issue of Industry Update magazine will include a special feature focusing on the types of equipment eligible for the scheme.