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Stimulus Package Changes for Businesses: Immediate Write Offs

The Instant Asset Write Off

The Australian Federal Government has announced the increase of the Instant Asset Write Off amount from $30,000 to $150,000. All small to medium sized businesses with an annual turnover of less than $500 million are eligible.

Businesses that purchase assets under $150,000 will immediately be able to claim a deduction for the full amount in the 2020 financial year. The increase will only be available for new and second-hand assets purchased between 12th March 2020 until 30 June 2020.

Under the assumption that the same rules apply as the previous Instant Asset Write Off, any Small Business Pool closing balances with a value of under $150,000 at 30 June 2020 can be fully deducted.

Backing Business Investment

This 15-month investment incentive is aimed to support short-term business growth by increasing depreciation deductions, meaning you will pay less tax. A deduction of 50% of the purchase price of assets will be allowed in the first year (in addition to any depreciation claimed under current methods). This includes all assets purchased between 12th March 2020 and 30 June 2021. Regular depreciation rules will apply to the remaining value in following years.

It is yet to be confirmed whether the instant asset write off applies to motor vehicles above the depreciation limit. We will keep you updated when we receive confirmation of this.

These incentives are designed to assist businesses with cash flow challenges and help them to retain employees.

As this legislation is relatively new and changes are occurring rapidly, please do not hesitate to contact us for advice regarding your individual circumstances.

For further information please visit www.dese.gov.au.

If you have any questions regarding the information above and how it applies to your business, please get in contact with us via email or phone.