Instant asset write-off extended (and explained)

Wednesday 21 October, 2020

The recent budget announcements have seen the Instant Asset Write-Off Scheme tweaked and extended until 30th June 2022.

This scheme allows small businesses to claim immediate deductions on purchased assets, with no limit, each financial year (previously capped at $150,000 annually). Given the coronavirus pandemic, the rules around small business have shifted, and the write-off scheme means any business with an annual turnover of less than $5 billion is eligible. Yep, $5 billion.

Assets include new vehicles, tools, office equipment and the cost of improvements to existing equipment. These assets must be used (or installed for use) in the same year of your claim. The scheme can also be used on second-hand assets for businesses with a turnover of less than $50 million annually.

If you buy an asset for your business that you also use personally, you can only write-off the percentage it is used for business purposes.

For example, if you spend $50,000 on a car that you use 70% of the time for your business and 30% of the time personally, you’re able to write off $35,000.

While the instant asset write-off scheme extension has been welcomed by small business owners, it’s important to know that if you utilise the scheme, with some banks and other lenders, it may affect your ability to borrow for home or personal loans.

All banks and lenders have varied policies on how they see income and how you’re assessed for affordability. With over 200 years combined experience, our team understand the requirements of each lender. We are able to assess each individuals’ circumstances and offer sound advice to ensure your decisions won’t negatively impact your borrowing capacity in the future, while still seeing your business flourish.

If you’re looking to improve or fix a bottleneck in your business and need a hand securing finance – or even just some advice – we’d love to help!

You might also like...

Finance Brokers Tasmania selling a house Hobart

Preparing for Interest Rate Hikes!

When you consider a ‘hike’, what is the first thing that springs to mind? A walk through the bush or a sharp rise? The RBA lifted the official cash rate by 25 points to .35 percent last week – the first rise in 11 years. While we understand that a rate rise is never a good thing, interest rates are still at historic lows and we wonder if the use of the word ‘hike’ is a necessary one!

Read more...
Finance Brokers Tasmania Lance Cure Gary Casboult

What is a SMSF?

Self-managed super funds (SMSF) are a different way of saving for retirement. A SMSF gives flexibility and control over where your retirement funds are invested, including the opportunity to invest in residential and commercial property.

Read more...
Finance Brokers Tasmania - fixed interest rates

Government Grants - A budget Update 2022/23

If you missed the 2022-23 budget announcements this week, you may have missed the incentives announced for home buyers. While most are not new, the government have increased the number of spaces available for eligible home buyers through their Home Guarantee Scheme.

Read more...
FBT Hobart Bec and Dini

Do you need pre-approval?

We are often asked if you need pre-approval before looking for your dream home. Pre-approval is not essential but it is one way to ensure you don't miss out!

Read more...