Is your business planning to purchase new assets? Perhaps new tools, a vehicle or computer upgrade? If so, you may be able to take advantage of the Coalition’s expanded “instant asset write-off” incentive or other key measures in this year’s federal Budget.
This write-off is a tax relief measure running until 30 June 2020 that allows eligible businesses to claim an “instant” deduction (ie in the current year’s tax return) for certain asset purchases, rather than having to deduct this expenditure over time.
For the first time, medium-sized businesses (with annual turnover below $50 million) now qualify for the write-off with effect from Budget night (2 April 2019). Previously, only businesses with turnover below $10 million were eligible.
The asset cost threshold has also increased from $25,000 to $30,000, meaning qualifying businesses can now deduct depreciating assets costing up to $30,000 that are first used, or installed ready for use, from Budget night to 30 June 2020. The $30,000 threshold applies per asset, which means your business can instantly deduct multiple assets that each cost less than the threshold.
Small businesses must also have purchased the asset on or after 7.30pm AEST on 12 May 2015. Medium-sized businesses must also have purchased the asset on or after 7.30pm AEST on 2 April 2019.
Fortunately, this announcement has already been legislated ahead of the upcoming federal election – bringing some welcome certainty for businesses.
Another important announcement is the offer of increased incentive payments to employers and apprentices operating in recognised industries. This measure is designed to address specific skills shortages in the following trade occupations: carpenters and joiners, plumbers, hairdressers, air-conditioning and refrigeration mechanics, bricklayers and stonemasons, plasterers, bakers and pastry cooks, vehicle painters, wall and floor tilers, and arborists. This list will be updated annually as industry needs change.
From 2019–2020, employers hiring a new apprentice in an eligible occupation will receive an extra $4,000 incentive payment ($2,000 after 12 months and $2,000 at the completion of the apprenticeship). This is in addition to the existing $4,000 incentive payment, bringing the total employer incentive to $8,000. The apprentice will also receive a $2,000 incentive payment ($1,000 after 12 months and $1,000 at completion).
We’re here to help your business take advantage of these two Budget announcements. The instant asset write-off is only available until 30 June 2020, so talk to us today about tax planning for your new asset purchases.