Small and medium-sized businesses will be the big winners from proposed changes to the Instant Asset Write Off Scheme, with amendments introduced in Parliament set to increase eligible purchases from $20,000 to $30,000.
The changes would also extend to businesses with an aggregated turnover of less than $50m, significantly expanding the current scope of businesses eligible for the scheme.
While the changes are not yet legislation, if passed they represent a potential massive tax win for businesses according to Retinue Accounting CEO Steven Nicholson.
“For businesses thinking about asset purchases between now and the end of the financial year, these changes would enable them to factor in assets of up to $30,000 not $20,000 as was the previous limit.”
“More businesses would also be eligible to claim the deduction. Currently, only businesses with a turnover of $10m or less could claim the Instant Asset Write Off, but the proposal expands that to $50m. Many more businesses would become eligible.”
“Our advice is to go back and check for any assets already purchased of between $20,000 – $30,000. Ask your accountant what the impact will be on your year-end tax bill if these assets could be claimed under a revised Instant Asset Write Off Scheme.”
“Buying assets just to save tax is rarely a smart business decision, but should these changes go ahead, it may be worth bringing forward asset purchases planned for later in the year to before 30 June to take advantage of this new limit.”
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