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Looking to purchase business equipment? You need to consider the small-business instant asset write off changes by 30th June 2017.

If you are a small business, the current instant asset write-off threshold is $20,000. However, from 1 July 2017, this threshold reverts back to $1,000.

What does this mean?

Any small business with turnover of less than $2,000,000 can purchase assets up to the value of $20,000 and get an immediate tax deduction for them rather than having to write them down over the following years.

The asset must be purchased, installed and ready for use by 30th June 2017 to be able to claim an instant asset write-off of up to $20,000. After this date, the threshold reverts back to $1,000.

This tax concession is ideal for those businesses that were planning to purchase assets anyway or have a real business need to update equipment. If it can improve your bottom line (net profit) then look at taking advantage of the opportunity.

What qualifies? Here are a few examples of purchases that qualify:

·         IT hardware such as desktop computers, printers, scanners and photocopiers, but not in-house software where the firm intends claim under the software development pool rules

·         Office or shop furniture and fittings, such as new tables for a cafe

·         Display screens, kitchen equipment, signage and air conditioners

·         Work vehicles, such as a $19,999 Ute

·         Tradesmen’s tools and machinery

·         Plant and equipment

·         Sheds or storage containers for storing equipment.

The asset must be installed and ready for use by 30th June 2017.

What’s not included?

There are a small number of assets that aren’t eligible for accelerated depreciation, for example horticultural plants that have specialised depreciation rules. If used wisely, the instant deduction can be a real benefit to profitable small businesses that were planning on purchasing assets anyway. Please talk to us first to be sure that this will be beneficial to you.

If you’re thinking of purchasing equipment, and the immediate deduction is more beneficial than writing off over several years, consider acting now. For more information or advice on whether it is beneficial for your business, contact The A Firm team on 07 5596 4604, or email info@theafirm.com  

Need finance? Don’t forget that our Finance division can arrange finance for motor vehicles and equipment!

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