Under the instant asset write off, eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use. Instant asset write–off can be used for: … new and second-hand assets.
From 12 March 2020 until 31 December 2020 the instant asset write-off:
- threshold amount for each asset is $150,000 (up from $30,000)
- eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).
| Eligible businesses | Date range for when asset first used or installed ready for use | Threshold |
|---|---|---|
| Less than $500 million aggregated turnover | 12 March 2020 to 31 December 2020 (see note) | $150,000 |
| Less than $50 million aggregated turnover | 7.30pm (AEDT) on 2 April 2019 to 11 March 2020 | $30,000 |
| Less than $10 million aggregated turnover | 29 January 2019 to 7.30pm (AEDT) on 2 April 2019 | $25,000 |
| Less than $10 million aggregated turnover | 1 July 2016 to 28 January 2019 | $20,000 |
| Less than $2 million aggregated turnover | 7.30pm (AEST) on 12 May 2015 to 30 June 2016 | $20,000 |
| Less than $2 million aggregated turnover | 1 January 2014 to prior to 7.30pm (AEST) 12 May 2015 | $1,000 |
| Less than $2 million aggregated turnover | 1 July 2012 to 31 December 2013 | $6,500 |
| Less than $2 million aggregated turnover | 1 July 2011 to 30 June 2012 | $1,000 |
- New Coffee Machine and grinders – So you don’t depend on your coffee roasters to supply you with, therefore adding more value to your business;
- Vehicle – You can upgrade your car to a suitable vehicle such as van, pick up, etc;
- Kitchen Equipment – such as oven, fridge, cold room, iced machine, etc;
- Marketing Equipment – such as, camera for photographing and making videos;
- Office equipment – such as computer, printer and air conditioning.
Also remember that for retail businesses, you can also receive GST back from all purchasing.
Make sure you have a chat with your accountant as soon as possible to ensure using the instant tax write off in the most effective way. This link shows some of the excluded assets.
Car limit for instant write off
For the ATO’s instant asset write off, the car limit applies to the cost of passenger vehicles (except a motorcycle or similar vehicle) designed to carry a load less than one tonne and fewer than nine passengers. The one-tonne capacity relates to the maximum load your vehicle can carry, also known as the payload capacity.
The payload capacity is the gross vehicle mass (GVM) as specified on the compliance plate by the manufacturer, reduced by the basic kerb weight of the vehicle.
The basic kerb weight is the weight of the vehicle with a full tank of fuel, oil, and coolant together with a spare wheel, tools (including jack) and factory-installed options. It does not include the weight of passengers, goods, or accessories.
- Payload capacity = GVM – basic kerb weight
The car limit is:
- $57,581 for the 2019–20 income tax year
- $59,136 for the 2020–21 income year.
The instant asset write off is limited to the business portion of the car limit for the relevant income tax year. For example, the car limit is $57,581 for the 2019–20 income tax year. If you use your vehicle for 75% business use, the total you can claim under the instant asset write-off is 75% of $57,581, which equals $43,186.
You cannot claim the excess cost over the car limit under any other depreciation rules.
For more information see details on ATO website using this link.
