The measure announced in the 2019 Federal Budget to give medium-sized businesses (turnover greater than $10M but less than $50M) the ability to immediately deduct the cost of assets costing less than $30,000 is now law. The new Act also increases the current threshold for the instant asset write off for small businesses (turnover less than $10M) from $25,000 to $30,000.
There have been a couple of changes to the instant asset write off this financial year so here is a quick snapshot of the changes that have occurred:
|Date assets purchased||Business Turnover||Instant Asset Write Off|
|1/7/2018 – 28/1/2019||Less than $10M||Less than $20,000|
|29/1/2019 – 1/4/2019||Less than $10M||Less than $25,000|
|2/4/2019 – 30/6/2020||Less than $50M||Less than $30,000|
It is important to note that it is the date the asset is installed and ready for use in your business that determines the date that the instant asset write off applies. Also, the cost of the asset includes all costs involved in getting the asset ready for use, such as installation and delivery costs.
For assets that exceed the thresholds outlined above and cannot be instantly written off:
- Small businesses (turnover less than $10M) can use the small business pool and claim a 15% deduction in the first year and 30% each year after;
- Medium businesses (turnover greater than $10M but less than $50M) must use the general depreciation rules.