The Instant Asset Write Off is an opportunity for Australian businesses to claim the entire value of a new asset as a tax business deduction which will reduce your business’s taxable profit for this financial year. It’s worth considering right now if you thinking about buying any new assets for your businesses. A reduced tax bill entering into FY22 will be a nice bonus, plus you can take advantage of EOFY sales!

Here is the lowdown.

Who is eligible?

Registered Australian businesses with a turnover up to $500 million.

How much can I write off?

You can write off the total cost of the asset provided:

  • The total cost of the asset is within the threshold, currently $150,000, irrespective of any trade in amount;
  • You can purchase multiple assets but the value of each one must be under the threshold of $150,000;
  • You can only claim the business portion of the asset (if you also use it for personal purposes)
What can I use it for?

You can use it to buy plant and equipment, which can be new or used, including items that depreciate (i.e. lose value over time), such as:

  • Vehicles
  • Tools
  • Plant or machinery
  • Computers and laptops
  • Office equipment, and more.
Is it right for my business?

Essentially, you can claim the entire value of the asset in just one year and gain the full benefit now, rather than depreciating it over a number of years and gaining a longer term benefit. Make sure that you’re ok with this or chat to your accountant or bookkeeper to make sure.

What is the deadline?

You need to have used or installed ready for use by 30 June 2021 (if you want to write the asset off in FY21).

Where do I find out more?

For more details information, visit the ATO website.

Please note this is not financial advice, but purely guidance to help you consider whether the Instant Asset Write Off could help your business.

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