There was a lot of talk about the government’s instant asset write-off scheme at EOFY, but remember that the scheme has been extended to 30 June 2020! Here’s a re-cap so you can help your clients take advantage this financial year.
Eligible small businesses can deduct the business portion of most depreciating assets costing less than $30,000 each. In all instances, we recommend that your clients seek advice from their tax advisor regarding their eligibility under the scheme, and how it will impact their business. This can be claimed for an unlimited number of assets purchased, installed or used before 30 June 2020.
How can your clients benefit with the instant asset write-off?
Improve current assets
The cost of improvements made to items previously written off under this scheme are also eligible to be written off.
Claim an unlimited number of assets
There is no limit to how many assets can be claimed. Deductions for equipment valued up to $30,000 may be claimed for the business portion of assets purchased, installed or used before the next EOFY.
Extended until 30 June 2020
The current instant asset write-off scheme is available until 30 June 2020 and is now also eligible to businesses with a turnover of less than $50 million.
The below infographic is a great tool to help your SME clients understand the cash flow benefit of accelerated depreciation, and how they can maximise opportunities through a small business loan.
In this example, a client took a $29,500 loan and purchased and installed equipment on 1st May 2019. You can see the significant cash flow benefit gained by taking the loan and making use of the instant asset write-off, versus not taking out a loan facility and claiming normal depreciation on the asset.
Feel free to share this infographic with your clients.