Get Instantly Pre Approved Now. Only 5 Easy Questions!*

Instant Asset Write-Off!

As part of the 2023–24 Budget, the Australian Government announced the instant asset write off threshold will be $20,000, from 1 July 2023 until 30 June 2024.

The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets. Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that.

The Instant Asset Write off is a tax incentive in Australia that allows small to medium-sized businesses to immediately deduct the cost of certain new or second-hand assets.

This instant asset write off aims to encourage businesses to invest in assets while benefiting from reduced tax liabilities. Here’s a summary of its key features:

  1. Eligibility Criteria: Primarily targeted at small to medium-sized businesses. The eligibility criteria, including the annual turnover threshold, can change based on government policy.
  2. Asset Requirements: The write-off applies to both new and second-hand assets. However, there are specific requirements for the type of assets that qualify, which can include vehicles, equipment, and machinery.
  3. Threshold Limit: There is a cost threshold for each asset, which has varied over time due to changes in government policy. Assets costing more than this threshold can’t be immediately written off to a maximum of $20,000 in the first year and standard ATO guidelines as deprecation for the following years.
  4. Tax Deduction: Eligible businesses can immediately deduct the asset’s cost portion noted as depreciation in line with the threshold limit in the year the asset is first used or installed ready for use. This will reduce a business’s net profit, resulting in a tax saving.
  5. Impact on Cash Flow: By reducing taxable income, the write-off can positively impact a business’s cash flow.
  6. Timeframe: The policy has been subject to extensions and changes in thresholds over time, often in response to economic conditions.
  7. Claim Process: Businesses claim the deduction through their tax return, in the year the asset was first used or installed.
  8. Economic Stimulus: This measure is often used as an economic stimulus tool by the government to encourage business investment and economic activity.

If you would like to know more about the instant asset write off changes and tax advantages on offer now, please contact your Equipment Finance Expert today!

Stay in the Know with Chevron Equipment Finance's Newsletter

Subscribe to our newsletter for the latest industry insights, financial tips, exclusive offers, and updates on our flexible financing solutions.