As a result of the 2017-2018 Federal Budget announcements, the instant asset write-off of $20,000 for small businesses has been extended for a further 12 months.
The write-off was due to be reduced to $1,000 by 30 June, 2017. However, the government has decided to extend it, which gives businesses the opportunity to use the write-off for a further 12 month period until 30 June, 2018.
Here is what you need to know:
- To access the write-off your business must be trading, and must have an aggregated turnover of less than $10 million. The aggregated turnover is the annual turnover of all businesses associated with the entity, including any affiliates or entities connected with it.
- The asset must be used or installed and ready for use prior to 30 June, 2017.
- Second hand goods qualify.
- The immediate deduction can be used more than once, and is available to each item costing less than $20,000.
- Assets that are also used for private purposes will only qualify for the deduction to the extent of the business’s use.
You should consider the following before spending $20,000:
- Your business cash flow.
- Your need for the asset to run your business.
- Whether you have a taxable profit or loss – if is likely that you will make a loss, then there would be no short-term benefit to the business, if you spend this money now
We can help you with all facets of tax planning. Call us now and we will show you how to save money on tax.