As a small business owner, you’ll know only too well that spending money on new assets is always a carefully thought-out decision. And rightly so – asset purchase is a big deal. The 2019 Federal Budget saw two significant changes to the instant asset write-off scheme, which means that now there may be an even greater incentive for you to invest this financial year.
Key things outs:
The Australian Tax Office (ATO) says that businesses can instantly write-off assets if:
According to the ATO, there’s no limit on the number of individual assets that can be claimed via the instant asset write-off scheme (the $30,000 threshold is not a cumulative total) and it can be used on anything that relates to your business, such as office equipment, vehicles, tools and electronics. What’s more, assets can be purchased new or used. As for any purchases that exceed the $30,000 threshold, you can still write them off over a prolonged period of time by adding them to your pool of small business claims and depreciating as normal. Of course, any asset purchase should be in line with your overall business plan and strategy. Speak to your financial advisor for advice that suits your individual needs. If your business is structured as a partnership, the ATO says that all purchases made under the instant asset write-off will be owned by the partnership and not by individual partners. That means if one partner buys a new vehicle in their own name, it likely won’t be eligible for the write-off as part of the partnership, and if one of the partners fails to qualify as a small business taxpayer personally, they may not be eligible for the write-off either.
According to the Council of Small Business Organisations of Australia (COSBOA), this year’s budget was “one of the best in recent memory in that it focuses on the four core ingredients of economic growth: increasing disposable income; improving workforce skills; improving infrastructure; and encouraging business investment.” So, if you’ve been considering investing in new assets for your business, now could be the time to act.
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