$20k Instant Asset Write-Off Passes Parliament
Legislation has been passed to increase the instant asset write-off threshold from $1,000 to $20,000 for the 2024 income year, just days before the financial year ended. This means that small businesses can now write off purchases of depreciable assets costing less than $20,000 made between 1 July 2023 and 30 June 2024.
This change offers a significant cashflow advantage, allowing the tax deduction to be taken in the year of purchase rather than spread over several years. However, to qualify, the asset must be first used or installed and ready for use for a taxable purpose within the specified timeframe. For instance, simply having a receipt for an industrial fridge won’t suffice; it must be delivered and installed to claim the write-off in 2024.
The $20,000 threshold applies per asset, so small businesses can potentially deduct the full cost of multiple assets as long as each costs less than $20,000. A Bill to extend this increased threshold to 30 June 2025 is currently before Parliament.
Need Help?
If you need assistance understanding how the new $20k instant asset write-off can benefit your business, contact us today.For employers, it’s critically important to ensure that your payroll system, and all interactions with it, like salary sacrifice agreements, are assessed and updated. Your PAYG withholding will also be impacted.
