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Maximise Your Cashflow with the $20,000 Instant Asset Write-off

Date: 20-05-2024

Instant Asset Write-off - Alphaweld

The instant asset write-off is a windfall for small businesses, allowing them to immediately deduct the full cost of eligible assets up to $20,000. This Government initiative, being extended by a further 12 months until 30 June 2025 as part of the 2024–25 Budget, aims to enhance cash flow and reduce compliance costs for small businesses with an aggregated turnover of $10 million or less. The threshold applies on a per asset basis, meaning multiple assets can be written off provided each does not exceed the $20,000 limit.

Eligibility Criteria for Small Businesses

To take advantage of the $20,000 instant asset write-off, your business must meet specific criteria. Firstly, it should have an aggregated annual turnover of less than $10 million. Additionally, the assets you wish to write off must be eligible, costing less than $20,000, and must be first used or installed ready for use between 1 July 2023 and 30 June 2025.

Key Considerations with the Instant Asset Write-off

Effective planning is key to maximising the instant asset write-off. Businesses should consider planning their asset purchases to align with their operational needs and the write-off eligibility period. Investing in assets that help enhance productivity, reduce costs, or generate additional revenue can be particularly beneficial. Improve your cash flow while also upgrading your operational capabilities by strategically timing your investments.

Additional Information

Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that.

Leveraging the Instant Asset Write-off

The $20,000 instant asset write-off offers a substantial opportunity for small businesses to help improve operational efficiency and financial health with new machinery, such as welding machines, welding positioners, pipe rotators and fume extraction units.

By understanding and meeting the eligibility criteria, strategically planning asset investments, and ensuring compliance, small businesses can leverage this current government initiative for significant financial and operational benefits.

Please note: These measures are not yet law and the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 containing the Small Business Support – $20,000 instant asset write-off measure for the 2023–24 income year is currently before Parliament.

The information in this article is not intended as financial or investment advice and should not be construed or relied on as such. Before making any commitment of a financial nature you should seek advice from a qualified and registered financial or investment adviser.