As part of the 2015-2016 Budget the government have increased the immediate write-off for business asset purchases from the current $1,000 to $20,000 for eligible Small Businesses.
Who is eligible?
Any small business with an "aggregated turnover" of less than $2 million is eligible for the tax deduction.
What is eligible?
Any New or Second-hand assets with a purchase price under $20,000 (exclusive of GST) installed and ready for business use during the financial year are eligible for the deduction.
When does it apply?
It should be noted that this is a temporary measure and covers assets purchased during the period from 7:30pm 12 May 2015 to 30 June 2017.
Where to now?
It is important to note that the decision to invest in new assets for the business should not be based solely on deductibility, but rather on whether or not the acquisition will add value to your business (e.g. by increasing efficiencies).
Consideration should also be given to cashflow implications and if the short term gain is likely to have a positive or negative impact on the working capital of your business.
If you have any questions, or require any advice on how the new $20,000 deduction works or even if it's for you please contact us. Alternatively, please contact your usual contact at UHY Haines Norton.