As we come up to the end of the financial year, now is a good time to consider whether the purchase of new assets or equipment could benefit your business.
Asset and equipment finance is a great way to preserve cash flow and working capital. Of course, the asset can also begin to generate immediate income for you and there could be potential tax advantages to make the most of.
To the benefit of many business owners, the Government has recently raised the tax threshold cap for instant asset write-off from $25,000 to $30,000 and extended the end date to 30 June 2020. The eligibility criteria has also expanded to include businesses with an annual turnover of up to $50 million.
This increase provides business owners with the opportunity to select from a more diverse range of assets and allows businesses to immediately write off depreciable assets that cost less than $30,000, helping to offset the cost of investing in new equipment.
According to the ATO, these businesses can claim a deduction of up to $30,000 for the business portion of each asset (new or second hand), purchased and first used or installed ready for use from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020.
Also, businesses with a turnover of up to $10 million can claim a deduction for each asset purchased and first used or installed ready for use, up to the following thresholds:
- $30,000, from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020
- $25,000, from 29 January 2019 until before 7.30pm (AEDT) on 2 April 2019
- $20,000, before 29 January 2019.
This preserves your residential or commercial security and cash for other business needs.
If you’d like to know more about securing finance for new assets or equipment before June 30, please don’t hesitate to contact us, we’d love to be of assistance.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax and accounting advisors before engaging in any transaction.