For small and medium-sized businesses with turnover not exceeding $10m per year, the availability to claim an instant tax deduction of up to $30,000 per asset item becomes very appealing, especially when it means potentially saving a huge amount of tax.

The recent budget handed down by the Federal Government included an increase in the value of the instant asset write-off from $25,000 to $30,000 from budget night (i.e. 2 April 2019) to 30 June 2020.

This means if a business purchases an asset up to $30,000 in the period 2 April to 30 June 2019 will get the instant tax deduction in this current financial year. Similarly, it will be the case in the 2019/20 year for any asset purchased next financial year.

Note that the $30,000 threshold is exclusive of the GST. This means if the asset purchased is $28,000 which is inclusive of GST and is 100% used for business use, you claim $25,455, calculated as follows: $28,000 less (1/11 x $28,000). Of course, if the asset has a private use component, like a motor vehicle, you can claim a proportionate amount attributable to business use.

This instant asset write-off allowance presents an excellent opportunity for you to upgrade assets e.g. work computer, laptop, iPad, plant and equipment, and work vehicles costing up to $30,000 per item. Note that you do not need to have ready cash to purchase an asset if your working capital is tied up in debtors and stock. You can consider financing the assets, and arrange an asset loan type that is tailored to suit your needs.

If you have any questions about purchasing an asset and claim an immediate tax deduction this financial year, please discuss this with your client manager.

Remember, we are here to help clients to minimise tax as much as possible. Forward planning is a must to ensure the best tax and finance outcomes are achieved.


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