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The COVID boost: How changes to the asset write-off could help your business

May 7, 2020

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Article 20

The COVID boost: How changes to the asset write-off could help your business

May 7, 2020

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A tripling of the instant asset write-off as part of the Federal Government’s COVID response is set to help millions of Australian small businesses manage their cash flow.

Under the measure, eligible businesses will be able to immediately deduct purchases of each eligible asset valuing up to $150,000 – up from $30,000.

The changes, announced as part of the $320 billion COVID response, also sees an increase in the number of businesses eligible, as the threshold for aggregate annual turnover has jumped from less than $50 million to less than $500 million.

This boost applies from 12 March 2020 until 30 June 2020, for new or second-hard assets first used or installed in this timeframe.

Assets for immediate tax deduction include large items of capital equipment including vehicles, computer hardware, furniture etc. The $150,000 threshold applies to an individual asset, so eligible businesses can immediately write-off multiple items.

From 1 July 2020, the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be reduced to $1,000. Businesses with a turnover of more than $500 million are not able to instantly write-off assets.

This new measure is expected to decrease taxes paid by Australian businesses by $2.5billion over the next two years.

Learn more about your business’s eligibility and threshold amounts here.

The above information is a brief summary only and does not take into account your personal needs and is not a substitute for independent professional advice. We strongly recommend that you speak to your accountant as they will be able to provide you the most suitable advice for your individual circumstance and to ensure that you are also always receiving the most up to date information.



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