Instant Asset Write-Off Increased
Buying some accessories for your business vehicle this tax year? The instant asset write-off threshold has been increased to $150,000 and expanded to include businesses with an annual turnover of less than $500 million.
With the threshold for immediately deductible items (including caonpy, roof rack, drawers, tow bar and even frdiges for example) raised from from $30,000 to $150,000 for business with annual turnover of less than $500 million (up from $50 million) any equipment purchased for your business from 12 March 2020 will be 100% written off your tax until 30 June 2020.
What is the Instant Asset Write-Off?
It’s obviously more complicated than the government just handing out $150,000 tax returns for free.
This form of accelerated depreciation allows you to reduce your taxable income by $150,000 – resulting in a cash flow benefit relative to the rate you’re taxed at.
In real terms, this means that small businesses will have a less complicated tax return to complete, as their assets will either qualify for the immediate write-off or, if the asset is valued over $150,000, with depreciation based on useful life.
In order to make the most of the deductions, businesses would have to claim before June 30 of this year in order to maximise cash flow benefits with any assets claimed.
What can I claim?
The allowance permits for any asset you need to run your business including operating equipment (such as a canopy, roof rack or tow bar).
Assets over $150,000 can be fully written off, but not immediately. You can group your assets that exceed the threshold in order to depreciate them at the same rate (15% in the first year, 30% for every year after that). It is also worth noting that if an existing asset is in a depreciation pool and will be valued at less than $150,000 by June 30, 2020 it can be written off under this new method of accelerated depreciation.
If you do need accessories for your business vehicle, Lifestyler 4x4 has a dedicated, expert team in-store who can help you with solutions to get you on the road with expertise in everything Ironman 4x4. They will also be able to give you more specific information for your business needs.