With tax incentives extended into this financial year and suppliers still offering discounts, now may be the perfect time to update your equipment or vehicle – and the good news is that we’ve got your finance options covered!
The added advantage of the Instant Asset Write Off (now extended to 31st December 2020)
If you are purchasing a new or used asset (or multiple assets) this financial year less than $150,000 (GST Exclusive), and your business has an aggregated turnover less than $500 million, you can generally claim a deduction for each asset purchased. Providing the asset is purchased or first installed for use from 1st July 2020 until 31st December 2020. For assets that are passenger vehicles the instant asset write-off is usually limited to the business portion of the car limit of $59,136.
Accelerated depreciation advantages for assets over $150,000
If your business has an aggregated turnover of less than $10 million you can generally claim accelerated depreciation for the purchase of new assets with a cost (or adjustable value if applicable) greater than $150,000 (GST Exclusive). Providing the asset is purchased or first installed for use from 1st July 2020 until 30th June 2021.
Example of small business benefits from accelerated depreciation
If a new asset costs $250,000 (GST Exclusive) and was usually depreciated in the general small business pool then under previous arrangements a business would deduct 15% of the asset’s value when the asset was added to the pool, leading to a tax deduction of $37,500 (assuming there are no other assets in the pool).
Under the accelerated depreciation arrangements, the total deduction is 57.5% when the asset is added to the pool, leading to a potential deduction of $143,750 for the 2020–21 income year.
So don’t hesitate to give me a call to discuss your potential purchase and whether it is an asset that we can finance.
Call 02 9453 0300.