What is the SME instant-asset tax write-off all about?

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Last year, the Federal Government passed legislation to extend the instant asset tax write-off for small businesses until June 30, 2019 and increase it to $25,000 per asset during 2019. In the 2019 Budget, the Federal Government announced further plans to increase the instant-asset tax write off for small businesses to $30,000 per asset and extend the plan until June 30, 2020 – if they are re-elected on May 18.

For brokers including small business finance in their offer, this could be a great opportunity to considerably boost your profits before the end of the 2018/19 financial year – and perhaps next year too.

How does it work?

Small businesses can currently purchase an eligible asset up to $30,000 (ex GST) and write it off as a tax deduction in the same financial year of purchase. What’s more, the tax write-off could apply to more than one new asset.

In the past, only assets valued up to $1,000 (ex GST) could be written off in this way. Tax deductions for more expensive business assets are usually based on depreciation and small business owners claim this expense in their business tax return over time.

To find out more about the different methods of depreciating business assets, or claiming the instant-asset tax write-off, visit the ATO website.

What are the rules?

A small business can currently claim an immediate tax deduction for the business portion of each asset purchased in the 2018/19 financial year provided:

  • the asset costs less than $30,000 (ex GST) and was purchased in 2019
  • the business has an aggregated group turnover of less than $10 million
  • the asset was first used or installed in the year of claim
  • the asset can be new or used
  • there is no limit on the number of individual assets that can be claimed via the instant asset write-off scheme as long as each asset costs $25,000 (ex GST) or less.

Good news for small businesses – including yours!

If the Coalition Government is re-elected on May 18, the instant-asset tax write-off for small business will continue until at least June 30, 2020. Increasing the asset amount to $30,000 per asset, as promised by Scott Morrison in his Budget speech, will certainly expand the scheme’s reach and stimulate more purchases from small businesses.

In the meantime, there’s still plenty of time for your small business customers to take advantage of the scheme in the 2018/19 tax year.

How can this benefit your broking business?

The write-off currently applies to vehicles, equipment, technology, machinery and any other business-related purchases under the $20,000 threshold. You can access lenders with highly competitive finance options to service these customers via the Connective Asset Finance lending panel and BOLT.

Now is the time to advise your small business customers that you have access to suitable finance options if they need funds to make any business purchases before the cut-off date of June 30, 2019. To make it easy, we’ve prepared a B2C marketing template for Connective members to send to their clients and can be accessed via Mercury.

Want to find out more?

Talk with your Connective Asset Finance BDM today.

Phillip Meehan – Business Development Manager for (NSW)

Phone: 0488 788 839 | Email phillip@connective.com.au

Sam Crouch – Business Development Manager (VIC/SA)

Phone: 0401 406 015 | E mail: samuel@connective.com.au

Anna Merlo – Business Development Manager (WA)

Phone: 0435 036 857 | Email: anna@connective.com.au

Matt Thompson – Business Development Manager (QLD)

Phone: 0421 758 579 | Email: matthew@connective.com.au

Stephen Light – National Scenarios & Relationship Manager

Phone: 0499 399 433 | Email stephenl@connective.com.au