To further support Australian businesses through the COVID-19 induced economic slump, the government has extended the $150,000 instant asset write-off for an additional six months to 31 December 2020.
Initially announced on 12 May and intended to last until the end of June, the government’s $17.6bn stimulus package in part temporarily increased the threshold of the instant asset write off up from $30,000.
With the tax break, businesses with annual turnover of less than $500m can invest in assets to support their business as the economy reopens and health restrictions continue to be eased; now, with the extension to the end of the calendar year, businesses have more time to acquire and install the assets, whether they be new or second-hand.
The government hopes this measure, which will support over 3.5 million businesses, will encourage business owners to follow through with the investment they already had planned before the unforeseen circumstances of the last several months, and galvanise others into executing investment sooner than intended to support economic growth over the near term.
The instant asset write-off threshold applies on a per asset basis, so eligible businesses can write-off multiple assets so long as each costs less than $150,000.
About the 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.
- The instant asset write-off can be used for:
- multiple assets if the cost of each individual asset is less than the relevant threshold
- new and second-hand assets.
- If you are a small business, you need to apply the simplified depreciation rules to claim the instant asset write-off. It cannot be used for assets that are excluded from those rules.
- The instant asset write-off eligibility criteria and threshold have changed over time. You need to check your business’s eligibility and apply the correct threshold amount depending on when the asset was purchased, first used or installed ready for use.
These details may have changed over time. For the most current information about the instant asset write-off please visit the ATO or click here.
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