Accounting and Tax

How your business can take advantage of the instant asset write-off

6 May 2020
2 min read

6 May 2020

The Australian Federal Government's announcement on 12 March 2020, outlined an Economic Stimulus Package to help businesses respond to the impacts of the COVID-19 pandemic.

The package includes an incentive for businesses to invest in equipment. Referred to as the Instant Asset Write-off, it allows businesses that invest in vehicles and equipment between now and 30 June 2020, to claim a one-off tax deduction on individual assets.

Here's some key information for you to consider from the announcement:

  • Claims can be made on any number of new and used assets, so long as the individual asset value is less than $150,000.

  • The write-off applies to businesses turning over an aggregated amount of less than $500 million per annum.

  • Policy includes business assets which are first used or installed for use in the period from now until 30 June 2020.

  • The purchase and claiming period ends on 30 June 2020.

  • For investments of $150,000 or more, businesses can deduct 50 percent of the asset cost in the first financial year of service providing it's installed before 30 June 2021.

  • You may be able to finance under a chattel mortgage agreement and still claim the benefits of the instant asset write-off this financial year.

One strategy Findex advisers have been using to help trading during this testing period is to top up your cash reserves by trading-in your current asset and placing these funds into your account.

Then you can finance the new piece of equipment and have the peace of mind of a warranty while enjoying better efficiency, less repairs and maintenance.

If you require any assistance understanding how to take advantage of the instant asset write-off, get in touch with the Findex Lending team who can provide expert advice and strategies.

Findex has developed a Government Stimulus Health Check and free Business Wellbeing Toolkit to help businesses manage potential risks and take full advantage of eligible stimulus assistance. Book your Health Check here.