Maximising the Instant Asset Write Off: Tips for Business Owners

At this point, you probably already know that the Instant Asset Write-Off scheme has been extended for the 2024/2025 financial year. That’s right! It’s back, and better than ever, giving you another opportunity to save big on those necessary business purchases.  Whether you need a new work vehicle, computers, or equipment, this scheme can help ease the financial burden. Let’s dive into how it works and what you need to know to maximise your benefits.

What is the Instant Asset Write-Off?

The Instant Asset Write-Off is an incentive introduced by the Federal Government that enables immediate deductibility for the full value of an asset, which costs $20,000 or less, if a business has an aggregated turnover of less than $10 million. Rather than claiming depreciation over a number of years, you can claim it all at once.

The Key Features

1. Threshold Limit
   The write-off applies to eligible assets up to $20,000. And the best part? There’s no limit on the number of items. If your business needs multiple items, you can claim each one individually, as long as they are under the threshold. It’s like tax-deductible shopping!
2. Eligibility Period
   Assets must be acquired and either first used or installed and ready to use between July 1, 2024, and June 30, 2025. For assets over $20,000, you can depreciate them using the small business simplified depreciation pool—15% in the first year, and 30% each year after.

Eligible Assets

Common eligible assets include:

• Vehicles (subject to load and passenger limits)
• Tools, machinery and equipment
• Computers and laptops
• Office furniture and fittings
• Technology hardware (printers, scanners, etc.)
• Manufacturing, agricultural and kitchen equipment
• Solar panels and energy-efficient technology

Non-Eligible Assets

Of course, not everything qualifies for the Instant Asset Write-Off. Non-eligible items include:

• Capital improvements to buildings
• Assets costing more than $20,000, or that are not installed and ready to use between 1 July 2024 and 30 June 2025.
• Intangible assets (websites, trademarks, etc.)
• Second-hand assets over $20,000
• Assets not used for taxable purposes

Don’t Buy What You Don’t Need

Just because you can claim it, doesn’t mean you should buy it. Do you even need it? Focus on what’s essential for your company’s long-term growth. If preserving cash flow is more critical right now, don’t waste money just for a tax deduction. Speak to an accountant to ensure all your purchases align with your current tax strategy and your broader business goals.

Are You Eligible?