Small and medium businesses around the country have been given another 12 months to take advantage of the federal government’s $20,000 instant asset tax write-off scheme.
Small Business Minister Michael McCormack said on Tuesday evening the government is ‘backing’ small businesses by extending the popular scheme, which was first introduced in the 2015 federal budget.
So what exactly does this mean for your business? How can you take advantage of the scheme?
Here’s a summary of the key points from the sub-$20,000 instant asset write-off scheme.
What is the $20,000 tax break?
Small businesses can claim immediate tax deductions for as many sub-$20,000 (excluding GST) purchases they make until June 30, 2018, rather than having to claim those purchases as deductions spread over several years.
This is a huge increase from the previous instant asset write-off threshold of $1,000.
Who is eligible?
The scheme was initially available to businesses turning over up to $2 million annually and this threshold was extended to $10 million in annual turnover after the government won Senate approval for the first phase of its 10-year enterprise tax plan earlier this year.
Businesses with an annual turnover of up $10 million will now have until June 30, 2018, to immediate deduct eligible assets up to the value of $20,000.
Any asset that is under $20,000 and involved in running a business is covered by the scheme.
Even better, the threshold applies on a per asset basis, so you can Finance several assets costing up to $20,000 each and they would all qualify for the write off.
Assets over $20,000 are not eligible for the instant tax write-off, but can still be fully written off over a longer period.
Not sure if you qualify? Funding Assets over $20,000? New businesses or don’t ‘tick the boxes’? Call us to discuss your options on 1300 736 780.
Information contained in this article is general in nature. For more information from the ATO click here, or refer to your accountant.Categories: Blog
Tags: Business Loan, Equipment Loan, Finance, Small Business, SME, Tax