Extended to June 2022 with no price cap on assets purchased.
On September 25th 2020, Treasurer Joshua Frydenberg announced in the federal budget that the Instant Asset Write Off Scheme would be extended to June 30th 2022 previously December 2020. Further changes he announced to the instant asset write off scheme is removing the limit of $150,000 per asset to unlimited. The government is encouraging businesses to purchase equipment to help boost the economy and encourage employment again.
So what does this mean for businesses? Businesses will be able to write-off the full value of all the new assets purchased for the next 2 years. It must be installed and ready to used by June 30th 2022. To be eligible for this scheme businesses must have an annual turn over of less than $5 billion.
The types of assets eligible under the scheme must meet the existing criteria for depreciable assets. It is important to reach out to your accountant to clarify assets you can purchase. It also includes new and used equipment. Business earning an annual revenue between $50million and $500 million will be able to claim a full deduction for secondhand assets worth up to $$150,000 and must be purchased by December 31st 2020.
If you are considering purchasing an asset to grow your business and don’t want it to burden your cashflow you can also apply for asset finance. Asset finance will allow you to purchase the asset, make monthly repayments but also take advantage of the scheme. There are also assets that can’t be finance. So best to check with your broker which assets can be purchased under finance. Thing such as cars, trucks, yellow goods, freezers and ovens would qualify for finance.
More information can be found here https://budget.gov.au/2020-21/content/factsheets/download/tax_fact-sheet.pdf
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