Sole traders and small business owners are facing unprecedented disruption from the coronavirus (COVID-19) pandemic, however, there are some ways to protect cash flow and improve your situation.
During these challenging times, the name of the game is to keep your business alive and positioned to ride the storm an and come out of it at the other end, with minimal effects as possible.
Whilst managing your inflows and outflows are equally important to survival, investing in your business is as important to remain ahead and up-to-date.
By reinvesting in your business could be an office fit out to a piece of machinery or a new vehicle. Whatever it is as a business owner or sole trader as we approach the end of the financial year it is a perfect time to start shopping around.
How can I take advantage of the increased instant asset write-off scheme
Businesses with an annual turnover of less than $500 million can now claim an instant deduction on assets worth less than $150,000 in the year they are purchased. This means, if you buy business equipment in the 2019-20 year, you can claim a deduction for that year for the full purchase price of the assets (up to $150,000 per asset).
What can I write off?
In order to be eligible to write of tax on purchases under the new threshold, assets need to qualify:
- Entire cost of the asset must be less than $150,000 (from 12 March 2020) or $30,000 (before 12 March 2020), not just the business-use portion and inclusive of GST
- Asset can be new or used
- Asset purchased was first used or installed and ready to use in the income year you're claiming it in
So, if you decide to invest in your business and upgrade that vehicle or heavy plant equipment then as long as each asset is valued under $150,000 you can instantly write the tax off.
It’s June now — Am I too late?
Leading on from the Federal Government’s incentive package introduction in March 2020, the $150,000 instant asset write-off scheme will be extended until December 2020 — which means small business owners and sole traders are set to benefit.
To sum it up, it means businesses large or small have until the end of the calendar year to purchase any vehicle(s) and/or equipment to aid their business and write off the tax immediately. This also applies to buying multiple assets, provided they fall under the $150,000 threshold.
A consultant from 1800Approved is on standby to help you secure additional finance to help take advantage of this stimulation package and get you the best rate available to finance that next asset — be it a piece of machinery, a new vehicle or a fleet of vehicles!