From 12 March 2020 until 30 June 2020 the instant asset write-off:
threshold amount for each asset is $150,000 (up from $30,000)
eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).
Note: On 9 June 2020, the government announced it will extend the $150,000 instant asset write-off until 31 December 2020. This proposed change is subject to the parliamentary process and is not yet law.
Eligibility
Eligibility to use instant asset write-off on an asset depends on:
your aggregated turnover (the total ordinary income of your business and that of any associated businesses)
the date you purchased the asset
when it was first used or installed ready for use
the cost of the asset being less than the threshold.
If you run a small business and choose to use the simplified depreciation rules, you must use instant asset write-off on all eligible assets.
Thresholds
The thresholds have changed over the last few years and are as follows:
Under instant asset write-off eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used, or installed ready for use.
Instant asset write-off can be used for:
multiple assets as long as the cost of each individual asset is less than the relevant threshold
new and second-hand assets.
It cannot be used for assets that are excluded from the simplified depreciation rules.
Cars
If you purchase a car (a passenger vehicle, except a motor cycle or similar vehicle, designed to carry a load less than one tonne and fewer than nine passengers) for your business, the instant asset write-off is limited to the business portion of the car depreciation limit of $57,581 for the 2019–20 income tax year
For more information see the ATO site at https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/#
Should you need further advice or need to discuss your particular requirements, please contact us, Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au