The Instant Asset Write Off is an opportunity for Australian businesses to claim the entire value of a new asset as a tax business deduction which will reduce your business’s taxable profit for this financial year. It’s worth considering right now if you thinking about buying any new assets for your businesses. A reduced tax bill entering into FY22 will be a nice bonus, plus you can take advantage of EOFY sales!
Here is the lowdown.
Who is eligible?
Registered Australian businesses with a turnover up to $500 million.
You can use it to buy plant and equipment, which can be new or used, including items that depreciate (i.e. lose value over time), such as:
Essentially, you can claim the entire value of the asset in just one year and gain the full benefit now, rather than depreciating it over a number of years and gaining a longer term benefit. Make sure that you’re ok with this or chat to your accountant or bookkeeper to make sure.
You need to have used or installed ready for use by 30 June 2021 (if you want to write the asset off in FY21).