Accelerate Your Deductions

Several years ago the government legislated the temporary ‘instant asset write off’ concession for small business entities. In short, this concession allows a small business entity to immediately deduct the full balance of the purchase of a qualifying asset that costs lower that the instant asset write off threshold. The deduction for the purchase of such assets would ordinarily be required to be claimed, or depreciated, over a number of years. The benefit of this concession would be to allow an entity to claim a larger deduction immediately and thus enable the entity to reduce their taxable income and tax payable.

You may have heard of this concession previously but are you aware that the government has recently passed legislation to increase the instant asset write off threshold and expand the concession to make it available to medium sized businesses.

So what is a medium sized business?

A medium sized business is an entity with aggregated turnover of greater than $10 million but less than $50 million.

What assets qualify for the concession?

For a medium sized business an asset must both be purchased and installed and available for use on or after 7:30 pm on April 2019 but before 1 July 2020.

What is the instant asset write off threshold?

The instant asset write off threshold is $30,000 (GST exclusive).

This concession for medium sized businesses is legislated to end 30 June 2020.

Assessing whether your business or an asset purchase qualifies for this concession can be complex so contact our office should you require assistance.

By Andrew Diamanti. Senior Accountant – Venture Private Advisory.

You might also want to read this Work expense deductions.