If your business is eligible, it may benefit you to claim an immediate deduction for business assets bought and used this financial year. This means you claim the entire expense of the asset rather than depreciating it and apportioning the cost over a number of years.
In the May 2023 budget for the 2024 financial year, the proposed instant asset write-off threshold was announced as $20,000. While the measure is not yet law, we don’t anticipate any problems with this law passing.
The $20,000 threshold applies to each asset so you could claim a tax deduction for multiple assets in the same financial year.
Can You Claim the Instant Asset Write Off?
If your business has an aggregated turnover of less than $10 million, you can claim the total cost of eligible assets. Assets must be installed and ready for use between 1 July 2023 and 30 June 2024. The payment for the asset may be in a different tax year.
Whether you are on a cash or accrual basis for your BAS will govern which period you claim applicable GST within.
Some businesses and types of assets can't be claimed immediately – talk to us if you’ve got lease arrangements for assets you’ve bought, horticultural plants such as grapevines, research and development assets, or you're in the building and construction industry. Some types of software and improvements to assets are also excluded. Assets costing more than $20,000 are treated differently.
And remember – you can only claim a business deduction for business use of assets – if you use an asset for both personal and business, you’ll need to apportion the percentage of usage between the two.
Keep your Records!
Remember to keep all your business records for at least five years, including all asset purchase and installation documents.