The $20,000 instant asset write-off was extended into the 2017-18 financial year in the latest Australian federal budget. It's truly a real boon for small businesses. It allows small businesses that turnover less than $10 million to instantly write-off 100% of any business related purchase under $20k.
This applies to things like vehicles, tools, equipment — pretty much anything that isn't a horticultural plant or in-house software.
Newsflash: not many things cost over $20,000, which leaves you with genuine carte blanche. What does your business need? Might as well pick it up now while the going is good.
But there it is: choice paralysis. What does your business need? And are there any interesting ways to take full advantage of the tax break? You're not limited to one purchase, but funds are limited also: what should you prioritise?
Worthy of note: $20,000 instant asset write-off isn't necessarily 'free money', it's tax relief and, on that note, it's worth mentioning that you should only buy what will benefit your business — otherwise you're still wasting money.
What makes sense: use the tax break to get the thing you've been meaning to buy but felt as though you couldn't. It's not an excuse to go buck wild!
And also, a quick heads up. Things that aren't covered by the tax break: capital works, assets already allocated to low-value pools, assets leased out more than 50% of the time on a depreciated asset lease, horticultural plants and in-house developed software.
Are you eligible for the government's $20,000 small business tax deduction? If so, what kind of gear are you actually allowed to claim? This Etax infographic breaks down whether or not your business purchases will make the cut.
With that said, how about...
A Second Hand Vehicle
Worthy of note: second hand goods are eligible for the break. So if you have a business that requires the use of a vehicle, maybe consider picking up a second hand car/ute/van? You most likely won't get a brand new one at a $20,000 price point, but you sure as hell can find a decent second-hand number for that price.
New Computers For Your Office
I don't think I've ever worked in an office with nice computers. Come on, make my dream of an office with nice computers come true.
Purchasing computers for an entire office is a huge investment. Huge. I'm not here to tell you what you should buy or how much you should spend — that's an article for another day — we're just saying, computers is a good idea. As stated above, the only issue you might need to be made aware of: in-house developed software is not covered by this particular write-off. This almost certainly won't affect you, but worth keeping in mind.
An important distinction. Software for business purposes, like accounting software, is absolutely claimable.
Fix-Up Your Decor
This is an interesting one if you run a cafe, or a restaurant — any customer facing business really. Making your business presentable to customers is a fantastic way to make good first impression and establish that you're going to deliver delicious food, or do a good job no matter what the business.
Buy some new chairs, get a new sign. Sparkle a little love on your place of business.
Tools Of The Trade
If you're a tradie running your own business, you don't need me to tell you that tools are expensive. Goddamn tools are expensive.
Go get those tools. Write it off. Feel a little better about the money you just spent.
It can be hard to keep on top of all the various tax breaks and incentives small and medium businesses are eligible for. There are a lot of them. From deducting your stationary to grants for safety equipment.
And this doesn't even include the lower company tax rate for eligible small businesses. Here are a few other tax breaks and incentives your business might benefit from.