Just a reminder to all small businesses about the existing $20,000 immediate write off deduction. This deduction has been available since the 12th May 2015, when the government’s budget was passed down.
And what it means is that if you are a small business & you purchase a new (or 2nd hand) asset for less than $20,000 excluding GST, you will get to claim an immediate deduction for that expenditure, rather than being required to depreciate the asset over its effective life, which can be quite a substantial period of time depending on the asset. Now as I said, this deduction is available for small businesses, that is, an entity that is carrying on a business with an annual turnover of less than $10 million. Now that threshold was only $2 million but was increased to $10 million on 1 July 2016.
The really important thing to bear in mind here is that the $20,000 immediate write off deduction will not be available after 30th June 2018, that’s this year – only 4 ½ months away. So if there is an asset that you need in your business that will cost less than $20,000 excluding GST, now might be a great time to buy that & get your immediate deduction. Of course, getting a deduction shouldn’t be the driving reason behind purchasing a new asset, but if it’s something that you need and it makes good commercial sense, then why not buy it before 30th June.
If you’ve got any questions about this, feel free to contact me and I’ll be happy to help.
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