What has changed with the asset write-off scheme?
Many of you may recall that the Instant Asset Write-Off was introduced many years ago. The positive news right now in light of the current challenges we all face is the instant asset write-off threshold has been increased from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).
This increase was introduced on 12 March 2020 and is available until 30 June 2020, for new or second‑hand assets first used or installed ready for use in this time frame.
The higher Instant Asset Write-Off increased threshold provides cash flow benefits for businesses that will be able to immediately deduct purchases of eligible assets each costing less than $150,000. The threshold applies on a per asset basis, so eligible businesses can immediately write‑off multiple assets.
The Instant Asset Write-Off is due to revert to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020.
What is next step for government?
The Government is expanding access so that more businesses can take advantage of this offer. The annual turnover threshold for businesses is increasing from $50 million to $500 million. According to the government, expanding the threshold will mean an additional 5,300 businesses who employ around 1.9 million Australians will be able to access the Instant Asset Write-Off for the first time.
Eligibility details can be found on the Australian Tax Office website here. If you had plans to purchase an asset it would be worth the time to find out whether your business is eligible to use this scheme.
How can IT managers benefit from the asset write-off scheme?
The aim of the scheme is to bring forward those potential projects that have been put on hold. For IT managers, it means breathing life back into any infrastructure projects management has put on hold. We recommend exploring the scheme further with finance or accounts and of course management.