The Coronavirus Economic Stimulus Package measure allowing businesses to claim the “Instant Asset Write-Off” for eligible assets costing up to $150,000 until 30 June 2020 will now be extended to 31 December 2020.
Businesses with a turnover of less than $500 million will be eligible.
Rather than claiming the cost of the asset over its useful life (which could be over a number of years), businesses will be able to claim the entire cost of the eligible asset in the year it is purchased. The write-off threshold applies on a per asset basis and assets purchased can be new or secondhand.
This will help improve cash flow for businesses by bringing forward tax deductions for eligible expenditure and reducing the business tax liability for that year.
It also gives businesses another 6 months to acquire and install eligible assets to support their business as the economy reopens.
Without the extension, the instant asset write-off threshold would have reverted back to $1,000 on 1 July 2020.
The Federal Government has recently announced these measures and the legislation has not been released or passed.
Please contact us to find out more. The team at EMspire Advisory are experienced small business accountants in Sydney and would like to help you create, grow and succeed in business.
Please note that this information is not specific and is general in nature and cannot be relied upon as advice. Please contact us for specific advice for you and your circumstances.