09 Jul Guest Blog: Instant Asset Write Off by Nadia Linnane
The Federal Government has announced to not only extend the instant asset write-off for small business but also the increase in the limit from $20,000 to $30,000.
Thanks to recent changes, SBE taxpayers may be entitled to an immediate deduction in the 2019 income year for acquiring certain depreciating assets costing up to $30,000 (net of entitlement to GST input tax credits) for assets used or installed ready for use from 7:30pm AEST on 2 April 2019 until 30 June 2019.
Assets acquired prior to 2 April 2019 may also be eligible for immediate write-off, although the thresholds may be lower (e.g., the threshold is $20,000 for assets used or installed ready for use from 1 July 2018 until 28 January 2019, and $25,000 for assets used or installed ready for use from 29 January 2019 until 7:30pm AEST on 2 April 2019).
On top of this, for the first time, medium sized businesses (with an aggregated turnover of less than $50 million) may also be eligible to claim an immediate deduction for acquiring assets from 2 April 2019.
This will allow businesses with less than $10 million in turnover to write off purchased assets under $30,000 in their tax return up until mid-2020.
The extension of this initiative through to 2020 will give reassurance to small businesses looking to invest in their business for future growth.
When it comes to small business, cash-flow is king and ensuring this policy is instilled into the system provides some certainty. If small businesses can invest in their business, whether it be plant and equipment, vehicles or technology or anything else to make them more productive, that has a direct, positive impact on the economy, including the propensity to expand and employee more people.
It is important to note though that many small businesses still misconstrue the original incentive behind the asset write-off, interpreting it as $20,000 in tax relief.
This measure merely allows small business to accelerate the write-off of the purchases and assets and that helps with cash flow, but they must remember it’s still coming out of their pockets. Regardless of the threshold amount, they have to have access to the funds, by way of cash or finance.
Small business owners should obtain advice from their trusted adviser before undertaking any capital investment. Please feel free to call SBS Accountants & Advisors for your small business advice.
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Ask yourself the following questions:
- How much confidence and trust you have in your accountant?
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- How much action and effort do you feel you put in, compared to what your accountant gives you?
- How do you get along and relate to your accountant?
- What return on investment do they deliver?
- Does your accountant like talking to you and helping you?
If you are currently asking yourself any of these questions, then you’re not sure about your current advisor. That is why it’s important to put your trust in an established and trusted firm like SBS Accountants & Advisors. We will assist you with all your accounting and taxation needs, advise you on the latest tax breaks and effective tax structures, so as to maximise your business potential. We pride ourselves on providing personal service and commitment to you. We treat our clients as people, and not just numbers. Whether you are an individual who needs to prepare an annual tax return or a business requiring financial statements, analysis, advice, or help, you can turn to us for high-quality service focused on results.
The principal accountant and tax agent, Nadia Linnane, has more than 30 years of experience in tax and accounting. She works directly with you the client. You do not have to concern yourself about someone else doing your work, you have her personal attention always; someone who takes a personal approach and interest to you and your business. She focuses on helping clients avoid being ‘lost in the system’. She treats these clients as ‘family’, and offers a direct and personal approach in your business and financial affairs.