As you may be aware, the Federal Government recently announced some significant incentives in the budget to give everyone in business a reason to invest in people and equipment. The Government has predicted that these measures will help 99% of businesses write of the purchase of equipment instantly. We at Atlas Broker are very excited about the opportunities it creates for every one of our clients… the savings could be enormous!
How does it work?
The current Instant Asset Write Off will continue until December 31st this year, although you now have until the 30 June 2021 to have the equipment delivered. (This is for taxpayers with turnover of less than $500m and equipment costing less than $150k).
The Government has also created a second program that allows businesses (that turnover less than $50m) to ‘fully expense’ all assets – new or used – if they are purchased and installed by 30 June 2022. Unlike the Instant Asset Write Off there is no cap on the cost of the equipment!
What does this mean?
Most businesses will be able to reduce their profit by what ever they spend on equipment. For example, if a business was to show a profit $100k but they purchased a piece of equipment (eg car, earthmoving equipment, computers, manufacturing equipment) for $100k, this would reduce their profit to $0 and they are therefore likely to pay no tax for the financial year.*
Businesses with asset holding and trading entities need to be careful that they purchase the equipment in the correct entities, as the way the program is set up at the moment may mean that you miss out.*
How can we help?
Please contact your Finance Broker if you want to know more or call Atlas Broker on 1300 731 131.
*This does not constitute financial advice, we recommend you speak to your accountant to get advice relevant to your situation.