Contact Our Experts Today on 1300 855 456

Many small and medium enterprises are finding ways to survive under the stress of the Coronavirus pandemic and economic downturn, which has taken Australia into recession for the first time in three decades (albeit not as hard hit as a number of other countries). Businesses are finding ways to adapt and survive, in the hope they come out stronger on the other side. 

On March 12, 2020, the Federal Government announced that the instant asset write-off limit was to be raised from $30,000 to $150,000. There is also an extension of six months to write off assets. Furthermore, eligibility has been expanded so that businesses with a turnover of less than $500 million (up from $50 million) can claim this. This is expected to be in force at least for the remainder of the year.

 

The expanded write-off is intended to help SMEs cope better, as they will be able to save on tax. However, many eligible businesses may be unaware of the benefits available to them through this. SMEs purchases for business use include vehicles, equipment and office furniture, all eligible to be claimed in the write-off. However, other assets such as trading stock are not eligible for this write-off. Furthermore, vehicle deductions are calculated on a business use percentage basis.

The expansion of the values and eligibility for the asset write-off should be of great benefit, and is one of a number of initiatives designed to help businesses get through a uniquely difficult situation they have not been used to before. Businesses will make decisions based on their outlook and ability to cope with the situation, which will be factored into whether they take up the asset write-offs. It is likely many of them will.

If you are unsure as to what you are and aren’t eligible for, call us now for an obligation free chat.