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It pays to be organised this financial year

It’s nearly time to wrap up yet another financial year and it really does pay to get in early if you are considering equipment or car purchases. Due to COVID-19 disruptions it is taking longer to process all elements relating to setting up the loan.

For equipment and car finance banks are slower to process new deals and require more information than usual. Lending has become more cautious than previous times due to the current state of the economy.

Avoid leaving your final purchases until the last week of June to ensure your purchase can be completed in time. If you need assistance please phone the team at Zenith Finance on 1300 288 874.

 

Instant asset write-off for Australian businesses

Under 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:

• multiple assets as long as the cost of each individual asset is less than the relevant threshold
• new and second-hand assets.

It cannot be used for assets that are excluded from the simplified depreciation rules.

The instant asset write-off eligibility criteria and threshold have changed over time. You need to check your business’s eligibility and apply the correct threshold amount depending on when the asset was purchased, first used or installed ready for use.

Changes from 12 March 2020

From 12 March 2020 until 30 June 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).

$150,000 Instant Asset Write-Off

The $150,000 Instant Asset Write-Off provides businesses with an asset write-off. Assets must cost less than the instant asset write-off threshold and be purchased and used in the year that the write-off is claimed.

What do you get?

An asset write-off of up to $150,000.

Who is this for?

Eligible businesses.

Overview

The $150,000 Instant Asset Write-Off provides businesses with an asset write-off of up to $150,000 for assets costing less than the instant asset write-off threshold which are purchased and used in the year that the write-off is claimed.

What are the eligibility criteria?

To be eligible, you must:

• have an aggregated turnover of less than $500 million

Assets must:

• cost less than the instant asset write-off threshold
• be purchased and used in the year the write-off is claimed

How do you apply?

There is no application required. The write-off is applied when you lodge your tax for the relevant year.

Learn more by visiting ato.gov.au

• Eligibility
• Thresholds
• Exclusions and limits
• Work out your deduction
• Later sale or disposal of asset

Disclaimer: The information provided in this article was sourced from the ATO. For specific accounting and tax advice please check with your accountant or tax adviser first.