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Instant Asset-Write Off For Small Business - Extended

More good news for Australian business. The Australian Taxation Office has made the decision to extend the instant asset write-off, allowing small businesses the immediate deductibility for eligible assets costing less than $20,000 purchased by 30 June 2018. The immediate write off is applicable to small business entities with an aggregated turnover of less than $10 million.

What does the scheme mean?

If your business turns over less than $10 million per year and you make a purchase of an asset for less than $20,000 (excluding GST), whether new or second-hand, before 30 June 2018 the asset can be claimed as an expense, rather than slowly depreciating it over a set amount of years. There is also no limit to how many assets you can claim the deduction for.

What kind equipment / products could you claim?

Assets used for your business which may include portable buildings, site offices, portable toilets/showers.

How does the instant asset write-off work

For Example, if a business/company has to purchase a machine at a cost of $21,000 (including GST), the tax benefit would look like this:

  • $1,909 GST refundable

  • Tax saving at 27.5% (company tax rate) due to the immediate deduction – $5,250

  • Total cost of a $21,000 asset after tax saving = $13,841

How can I get more information?

For information regarding the extension to the Instant Asset Write-off please visit the Australian Taxation OfficeWebsite and consult your Accountant/Financial Advisor.

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