As we near the end of the financial year, many small and medium-sized businesses are actively looking for ways to invest in their operations. With the recent government announcement, the $20,000 instant asset write-off has been extended through June 2025, providing a continued opportunity for businesses to upgrade or expand their fleets and other equipment with significant tax advantages.
What is the Instant Asset Write-Off?
The instant asset write-off allows businesses to claim immediate tax deductions on the purchase of eligible assets costing less than $20,000. Originally introduced in 2015, this scheme has undergone several extensions to support businesses during various economic challenges. For the 2024 income year, the government has reaffirmed a fixed threshold of $20,000 for small businesses, applicable to assets first used or installed between July 1, 2023, and June 30, 2024.
Who Can Use the Instant Asset Write-Off?
Eligibility for the instant asset write-off remains targeted at small businesses with the following criteria:
- Business Operation: Must be actively operating in the 2024 income year.
- Turnover Limits: Annual turnover must be less than $10 million.
- Asset Cost: Each asset purchased must cost less than $20,000.
- Depreciation Rules: Businesses must opt into the simplified depreciation rules for the year they claim the write-off.
- Usage Requirements: Assets must be first used or installed ready for use within the specified timeframe.