There is no better time to buy assets for your business than now.
Simplified depreciation is another win for small businesses as it allows immediate write-off for a depreciating asset as long as it does not exceed the instant asset write-off threshold.
A depreciating asset is anything owned by the business, except excluded assets, that declines in value over time and has a limited useful life. A vehicle used for business is a perfect example of a depreciating asset.
Simplified depreciation can be applied by small business owners with an aggregated turnover of less than
> $10 million from July 1, 2016 onwards
> $2 million for previous income years
From 7.30pm (AEST) on 12 May 2015 until 28 January 2019 |
From 29 January 2019 until before 7.30pm (AEDT) 2 April 2019 |
From 7.30pm (AEDT) on 2 April 2019 until 30 June 2019 |
You can immediately deduct the business portion of most depreciating assets costing less than $20,000 each |
You can immediately deduct the business portion of most depreciating assets costing less than $25,000 each |
You can immediately deduct the business portion of most depreciating assets costing less than $30,000 each |
Date Range |
Threshold for each asset |
7:30pm (AEDT) 02/04/2019 to 30/06/2019 |
$30,000 |
29/01/2019 to before 7.30pm (AEDT) 02/04/2019 |
$25,000 |
7.30pm (AEST) 12/05/2015 to 28/01/2019 |
$20,000 |
01/01/2014 to prior to 7.30pm (AEST) 12/05/2015 |
$1,000 |
01/07/2012 to 31/12/2013 |
$6,500 |
01/07/2011 to 30/06/2012 |
$1,000 |
Businesses with a turnover from $10 million to less than $50 million may also be eligible for the instant asset write-off. This applies to assets costing less than $30,000 each purchased and used or installed ready for use from 7.30pm (AEDT) 2 April 2019 to 30 June 2019.
The cost of an asset is the amount paid for it plus any other amount paid to make it ready for use.
For example:
> Equipment: $10,000
> Transportation: $500
> Installation: $1,500
In this case, the cost of the asset is $12,000
What if the asset costs more than the instant asset write-off threshold?
Small businesses can pool the business portion of higher cost assets and claim:
For example: Billy, a plumber, bought a truck for $35,000 on April 3, 2019 and estimates that the truck will be used 70% of the time for business. Billy can add $24,500 ($35,000 X 70%) in his small business pool and claim $3,675 ($24,500 X 15%) new asset deduction.
Businesses that do not qualify for simplified depreciation will follow the general depreciation rules.
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