Originally due to revert back to $1,000 on July 1st 2020, the Federal Government has announced an extension of the instant asset write-off threshold increase, through to the end of the year, 31 December 2020. Great news for small business!
Important points to remember:
- The threshold amount for each asset is $150,000 (up from $30,000)
- Eligibility has now been expanded to cover businesses with a turnover of less than $500 million (up from $50 million)
- Assets can be new or second‑hand and must be first used or installed ready for use by 31 December 2020.
More information can be found on the ATO’s website.
How can Seek Financial help?
Effectively managing the cash flow in your small business is essential to its success. Seek Financial can help with your equipment finance which will enable you to maintain your cash flow and working capital and help you to generate immediate income.
- Tailor the structure of the finance to work in with your cash flow needs
- Find the best rate available from our growing panel of business lenders
- Create a financial package to meet your business and personal needs
- And work directly with the lenders to finalise your finance application as quickly as possible while you continue to spend time in your business.
What equipment can I finance?
Any plant or equipment that can help generate income for your business can usually be financed. These include:
- Motor vehicles
- Commercial vehicles
- Engineering equipment
- Computer and technology
- Medical and dental equipment
- Office equipment
- General business equipment.
Motor vehicle increase
The ATO has also increased the value of a car that can be claimed for depreciation purposes (and GST if registered).
The car limit is:
- $57,581 for the 2019–20 income tax year
- $59,136 for the 2020–21 income year.
Please note that the instant asset write-off is limited to the business portion of the car limit for the relevant income tax year. For example, the car limit is $57,581 for the 2019–20 income tax year. If you use your vehicle for 75% business use, the total you can claim under the instant asset write-off is 75% of $57,581, which equals $43,186.
If you would like to take advantage of the instant asset write off threshold increase, please don’t hesitate to get in touch. As small business owners ourselves, we know how time-hungry and stressful owning a business can be and It would be our pleasure to help you achieve your goals.
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.