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EOFY Asset Purchasing Benefits with an ATO Approved Instant Asset Write-Off.

 

 

If there was ever a time to invest in ergonomic chairs, standing desks, or other office tools to not only increase productivity but also to ensure your staff's continued well-being at this difficult time, then that time is now. To support business through the ongoing economic impacts of COVID-19, the Australian Government announced a further extension to the Instant Asset Write-Off Scheme.

There is no better time to make investments in your office productivity.

How It Works

How It Works and the Extended Lead Time

  • The instant asset write-off allows eligible businesses to claim an immediate deduction for certain costs relating to depreciating assets, providing it is depreciable under the Income Tax Assessment Act 1997, is acquired and first used by the relevant dates.
  • The Federal Budget 2020-21 introduced temporary measures that have built on the instant asset write-off previously in place and extended to more eligible businesses.
  • As part of the Federal Budget 2021-22 also the Government announced an extension of the Instant Asset Write Off by one year to 30 June 2023, however this extension is yet to be enacted by Federal Parliament.
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Take Full Advantage for Your Business

Subject to eligibility, the instant asset write-off scheme enables you to write off the entire amount of asset purchases in the financial year they were purchased. Usually, a business purchasing an asset could only depreciate a percentage of an asset based on the ATO’s interpretation of its useful life.

By deducting the full expense in a single year, you can decrease your taxable income and therefore tax payable. This considers the impending easing of COVID-19 restrictions and the uplift in the economy since businesses will need to invest in equipment to boost productivity to meet increasing demand.

Using Tax Deductions to Invest in Your Office Space
If, up until now, you have held back on upgrading your workspace because the delay in cash flow between purchasing the asset and receiving the tax benefit can take years, then taking immediate advantage of the instant write-off initiative is an incredible opportunity; purchase an asset for business use and you do not have to wait and claim the costs back over time. The increase in the instant write-off initiative will greatly improve cash flow for Australia’s small business owners but business owners need to understand how the deduction process works and what smart purchases to make to benefit their company.

Return to Work - Benefit of investing in Office Productivity
Supporting staff with the latest working solutions is recommended as a practical investment for the workspace; increasing not only staff wellbeing but also productivity which will help staff retention and growth and ultimately benefit from the write-off. With productivity and the well-being of your employees uppermost in your mind, the introduction of ergonomic seating, height-adjustable standing desks and proactive tools could go a long way in helping your business prosper post-pandemic.

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Who is eligible?

  • Businesses with an aggregated turnover of up to $5 billion may be eligible.
  • Depreciating assets may include new business vehicles and equipment. For businesses with aggregated turnover of less than $50 million, the assets can be second-hand.
  • Businesses with aggregated turnover between $50 million and $500 million may be eligible to deduct the full cost of eligible second-hand assets costing less than $150,000 that are purchased by 31 December 2020 and first used or installed by 30 June 2021.
  • Deduction claims may be made for the year in which the equipment is used or installed ready for use. This may be the same year in which you finance the equipment.
  • Generally, depreciating assets must be acquired after 7:30pm AEDT on 6 October 2020 and installed ready for use by 30 June 2022 (which will be extended to 30 June 2023 if the announced changes are enacted).

You should check with your accountant or registered financial advisor to determine your eligibility under the scheme.

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Disclaimer
This information is current as of 19th March 2022 and is for general information purposes only. It has been prepared without considering your objectives, financial or tax situation or needs. You should consider the appropriateness of this information to your circumstances before acting on it.

Tax law is subject to change. At the time of writing, legislation enacting this change is yet to be introduced into parliament. For the latest information, please check the ATO website. Living Edge (Aust) Pty Ltd is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax (financial) adviser.