The Instant Asset Write Off scheme was introduced in 2012 to help businesses through a tough period of economic change and has increased from $20,000 in 2015 to $30,000 in 2019.
The Government has since increased the Instant Asset write off scheme (IAWO) threshold from $30,000 to $150,000.
How will the higher Instant Asset Write Off scheme benefit your business?
The higher IAWO threshold will provide cash flow benefits for businesses as you will be able to immediately deduct purchases of eligible new or used assets.
Deductions can be claimed per asset so if your business is eligible, you may be able to write-off multiple assets straight away. You can claim on assets such as office furniture, tools and equipment and even cars, vans and trucks.
Current legislation (March 2020)
According to the ATO, under the Instant Asset Write Off scheme eligible businesses can immediately write off the cost of each eligible asset that costs less than the threshold ($150,000) and claim a tax deduction for the purchase cost.
The tax deduction can be claimed for the business portion of the cost of an asset in the year the asset is first used or installed ready for use, currently the 2020/2021 financial year.
Future amendments to the current legislation
On October 9th 2020 when the Australian Federal budget was handed down, Treasurer Josh Frydenberg announced an expansion of the Instant Asset Write Off scheme. Eligibility has been expanded to cover businesses with a turnover of up to $5 billion (currently $500 million). There will be no price ceiling for eligible assets purchased for business income producing purposes and the scheme will continue all the way until June 2022.
*At this time, the expansion hasn’t been made into law but it’s house of representative is voting on it shortly with the expectation that it will implemented. In his speech on October 6, the Treasurer described the new parameters for the IAWO as "a game changer" that would "unlock investment" and "dramatically expand the productive capacity of the nation and create tens of thousands of jobs".
Buying a car at Westside Auto Wholesale
You can capitalise on the Instant Asset Write Off assuming you meet the requirements. If you do, a car purchase at Westside Auto Wholesale for your business can allow you to immediately deduct and claim all costs at once. Not sure where to get started? The team at Westside Auto Wholesale are experts on this subject and are happy to assist you with your next work vehicle purchase today.
