Did you know that if you act before the 20th of June 2018, you can claim on the $20,000 Instant Asset Tax Write-Off Scheme? If you think that sounds too good to be true, you’re not alone. Nearly two-thirds of Australian businesses are under-utilising the scheme, most likely due to lack of capital and clarity. But we can show you how to crack open the full potential of this prospect. So allow us to demystify this great little tax break with insight and quick access to working capital. In order to unlock the full benefit of the $20K Instant Asset Tax Write-Off Scheme know this: Tax breaks are few and far between so this benefit is a real peach. And it can provide a sizable boost to your cash flow and a mega opportunity to improve your business, right now. By taking advantage of this tax deduction you will be able to decrease payable tax. Meaning you can spend up to $20,000 on as many material resources as required. And simultaneously, you will be reducing your taxable income by that value. This will allow you to claim on any number of growth requirements in your business as long as none of them exceeds $20,000.
So what does this actually mean?If you own any assets that can devalue over time, you can claim on the annual depreciation of each item. This normally works on a percentage over time. So for example, if your restaurant refrigerator will last 10 years, you can claim depreciation of 10% of its total value per year. But with the Instant Asset Write-Off Scheme, you submit the total depreciation as a once-off claim. Rather than working it off as incremental tax deductions year on year. This reduces tax payable and relieves you of lengthy inventory at the end of each subsequent tax year.
Are you eligible for the Asset Tax Write-Off Scheme?
The scheme was initially only open to businesses with an annual turnover of up to $2 million. But this has recently been amended to include businesses with a turnover of up to $10 million per year. This means that if your business turns over less than $10 million a year, you can claim the instant write-off. This applies to any business asset where the total value is less than $20,000.
Does that mean all assets?
No, sadly not all assets are created equally. So iit is definitely worth consulting your tax accountant for a full list of eligible assets before going on a spending spree. That said, the list is far and wide and includes a sizable range of retail assets. These include work vehicles, trade tools, machinery, IT hardware (desktop computers, printers, photocopiers), office, studio, shop furniture, fittings, equipment storage (sheds and storage containers), kitchen equipment, signage, air conditioners and more.
What’s the fine print?
We highly recommend you discuss all your options with your tax accountant. All tax incentives carry quite a bit of fine print including guidelines like these:
- Your asset can be new or secondhand but should be a new acquisition of your business.
- Claims must be made within the financial year the asset was purchased.
- You can only claim for ‘taxable proportion’. This means that if your business uses it 50% of the time, that’s the percentage you can deduct.
- There is no limit placed on the number of assets deducted. However, no asset can exceed $20K.
So how do you make the most of it?
While the scheme is advertised as ‘instant’, this actually refers to the year the goods were purchased. So it’s not referring to the immediacy of the refund. This reality can lead to cash flow strains in the period between purchase and refund. So given the fact that time is ticking, a Beyond Merchant Capital cash advance is a total game changer! A cash injection will mean an instant release of pressure. This will give you plenty of time to think about how to use that cash in order to best serve your business. By receiving an unsecured cash injection within 24 – 48 hours of application, you have enough time to upgrade equipment, improve your fixtures or whatever it is that you need to do to grow the success of your business. All before the end of this financial year. The 20th June is just around the corner, but we are on standby, ready and willing to get your ball rolling.
For more information and direction, get in touch with us today 1300 955 428
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