What does it mean for business?

  1. The Instant Asset Write Off and Stimulus threshold will now apply to businesses with annual turnover of less than $500M (previously $50M)
  2. For assets with a value less than $150k, purchased and ready for use between 12 March 2020 and 30 June 2020, businesses can instantly write off 100% of the asset value as a tax deduction for the June 20 financial year.
  3. There is another immediate 50% deduction for assets that don’t meet the $150k or 30 June 20 criteria above. For assets, no limit on value, purchased between 12 March 2020 and 30 June 2021, businesses can write-off 50% of the asset value with existing depreciation rules applying to the balance of the asset’s cost-details still to be confirmed.

What businesses are the best candidates for the incentive?

  • Businesses who expect to pay tax on profits at any time over the next 1-4 years
  • Businesses who need plant and equipment to improve efficiencies, save labour or add additional product lines
  • Anyone who needs a new car for business use.

Some fine print

The final version is still to come from the Government but what we understand is:

  • The above applies to purchases from 12 March 2020
  • Instant Asset Write Off eligibility to be purchased and installed ready for use before 30 June 2020
  • Additional 50% write off eligibility applies to purchases before 30 June 2021
  • Excluded are: assets expected to be leased out, assets allocated to a low-value asset pool, horticultural plants, software allocated to a software development pool and capital works.

What else is in the package?

  • Tax-free Payment of up to $25,000 for small and medium-sized businesses
    • Minimum tax-free payment of $2,000 for businesses with a turnover of less than $50 million from 1 January 2020 and 30 June 2020. Businesses will receive payments of 50 per cent of their business activity statements or instalment activity statement from 28 April with refunds to then be paid within 14 days.
  • Support for apprentices and trainees
    • Eligible employers will receive a wage subsidy of 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020.

We can help with more detail around asset write-offs and tax deductions.

Plus Tax-free Payments of up to $25,000 for small and medium-sized businesses and support for apprentices and trainees. Contact me directly for a discussion on 03 7018 3270 or get in touch via email on andrew.sutherland@halidonhill.com.au to see if you’re eligible.