Need Some New Equipment for Your Small Business?
It’s almost tax time again, which means it’s time to take a look at your books and ensure you are ready to sort out your finances for the year. When it comes to tax time, you might be looking for options to make the most of those end of financial year sales, and we have some good news here for anyone looking to buy some new equipment or a vehicle.
You may have heard of the Australian Government’s incentive to allow an instant asset write off for assets which have been purchased for less than $30,000. When these assets are bought, you can claim an instant asset write off – less any personal use component of course.
At Buddii, we’re here to help our clients get the best from their loans, depending on their personal circumstances. If you’re looking to make a new purchase, it’s definitely the time to do it – with instant asset write off available on a range of equipment, tools and vehicles, you can make the most of your deductions.
How the Instant Asset Write Off Works
The government’s incentive to allow instant asset write off means that you can claim the full amount a product is going to depreciate in one year. So how does this work for your business? What if you buy multiple items? Or what if you buy something and it costs $30,001? Can you still claim it?
Let’s take a look at some examples and see how this works for your business.
|Example One – Multiple Purchases|
Linda owns a mobile hairdressing business. On 1 May 2019, she bought a new van for her business use which was valued at $22,000. On 15 June 2019, Linda also bought a trailer to use with her business which is valued at $12,000.
The total spend for Linda is $34,000 but because the instant asset write off is available to every asset she can claim both the van and the trailer in her 2019 tax return.
|Example Two – Over the Threshold|
Gracie has a dog grooming business, and on 28 February 2019, she bought a new ute which cost her $32,000 and estimates that she will use the ute 50% of the time for business purposes.
Even though the business value of the ute is only $16,000, she cannot claim the instant asset write off as the asset value threshold has been exceeded. Instead, Gracie adds the ute to the small business pool.
|Example Three – Immediate Write Off |
Bronson is a solar power installer who works from home. He has bought a new computer for business use on 1 June 2019, and this computer cost him $5,000.
He will use the computer 80% of the time for business purposes, and so he claims the amount of $4,000 on his tax return.
What Does This Mean for Your Business?
Put simply; it means that if you are looking to buy some new equipment, tools or vehicles, now is the time to do it. We can help you get started with a small business or equipment loan which will allow you to access the funds to buy the equipment your business needs.
The ATO has been very generous every year with extending the instant asset write off, so if you do miss the cut off for tax time assets this yea,r don’t despair, you can always buy in the EOFY sales and then take advantage next year!
- If your business has previously been excluded from the instant asset write off due to turnover, then you can rejoice, because the ATO has expanded the limits to include businesses with a turnover of less than $50 million per year.
- We make it easy to understand the finance side of things so you can focus on the task of running your business – so if you have any questions about the instant asset write off offer and how to take advantage of it, call us to find out more.
We are a leading loan broker based in Brisbane and serving our clients nationwide. We’d love to discuss your loan options with you, so call us today to find out more about how we can help you capitalise on this ATO benefit. As a brokerage, we can only provide general advice and recommend you consult with a specialist or your accountant prior. You can reach us on 1300 BUDDII (1300 283 344).