Instant asset write-off for small businesses

Jun 13th, 2019

Instant tax write off for small business

In case you didn’t know there’s a $30,000 instant asset write-off for small businesses

If businesses are wanting to purchase assets, now may be the time given recent changes to the instant asset write-off (IAWO) thresholds.

The IAWO was first introduced in 2015 as a means to help small businesses through a period of economic change, however, given the cash flow benefit to businesses the IAWO has proven to be effective and popular regardless of economic conditions.

The Prime Minister, Scott Morrison, announced on 29 January 2019 the Government would increase the IAWO threshold for small businesses from $20,000 to $25,000 and extend the application for the increased threshold to 30 June 2020.

On 2 April 2019 as part of the 2019-20 Federal Budget more announcements were made that the threshold would be increased to $30,000 and that the IAWO would be expanded to include medium sized business as well.

Whether the threshold applies to small businesses depends on when the asset was purchased and when it was installed ready for use, and can be summarised as follows:

  • ready for use from 7:30pm AEDT on 2 April 2019, the threshold is $30,000
  • from 29 January 2019 until before 7.30pm AEDT on 2 April 2019, the threshold is $25,000
  • before 29 January 2019, the threshold is $20,000.

 

Deductions can be claimed on multiple purchased assets provided each is under the threshold.

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