Instant asset write-off tax boost extended
Businesses making up to $500 million per year will be allowed to continue writing off newly purchased assets worth up to $150,000 under an extended scheme designed to boost cash flow.
In March, the Federal Government massively expanded the scope of the Instant Asset Write-Off scheme in the early stages of the coronavirus economic shock.
The instant asset write-off threshold has been increased from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).
Today, 9 June 2020, Treasurer Josh Frydenberg said that arrangement, which was due to end on July 1, would remain in place until the end of the year.
Without the scheme, businesses would have to deduct the depreciation of their assets over several tax returns.
But with the scheme in place, eligible businesses can deduct the full cost of purchases up to $150,000 from the amount of tax they pay in the financial year the asset is purchased.
Assets can be new or second hand, and must be used or installed by December 31. The scheme can be applied to multiple assets worth up to $150,000, with the Government saying 3.5 million businesses would be able to benefit from the scheme.
Without today's intervention, the scheme was set to shrink substantially next month, only allowing the writing off of assets worth less than $1,000 by businesses earning less than $10 million per year.
The Money Edge | Bundaberg