CALL US: (07) 3367 0999 | EMAIL US:

The Instant Asset Write-Off Continues To The 2024-25 Financial Year

In a move aimed at bolstering small business cash flow and reducing compliance costs, the Government has announced an extension of the $20,000 instant asset write-off for another 12 months.

This extension, part of the 2024–25 Budget released on 14 May 2024, will see the measure continue until 30 June 2025.

This initiative allows small businesses with an aggregated turnover of less than $10 million to immediately deduct the full cost of eligible assets costing less than $20,000. To qualify, these assets must be first used or installed and ready for use between 1 July 2023 and 30 June 2025.

Eligibility

Eligibility to use instant asset write-off on an asset depends on:

You are not eligible to use the instant asset write-off on an asset if your aggregated turnover is $500 million or more.

If temporary full expensing applies to the asset, you do not apply the instant asset write-off.

How Does It Work?

The $20,000 threshold applies on a per-asset basis, providing substantial flexibility for small businesses to acquire and immediately write off multiple assets. This can be particularly beneficial for businesses looking to upgrade equipment, invest in new technology, or make other capital improvements without the burden of prolonged depreciation.

The immediate deduction is unavailable for assets valued at $20,000 or more. However, these higher-cost assets can still be placed into the small business simplified depreciation pool. This method allows businesses to depreciate the asset at a rate of 15% in the first income year and 30% each year thereafter, providing a structured yet advantageous depreciation timeline.

The continuation of this measure is designed to aid small businesses by improving their cash flow and reducing the administrative burden associated with asset depreciation.

By allowing immediate deductions on lower-cost assets, the government aims to incentivise investment and growth within the small business sector. However, this will be dependent on the individual circumstances of businesses as to whether or not they may benefit from this measure.

What About The Legislation Of This Measure? 

It’s important to note that while these measures have been announced, they are not yet law. The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, which includes provisions for the $20,000 instant asset write-off for the 2023–24 income year, is still before Parliament.

Once passed, this legislation will formalise the extension and ensure small businesses can continue to benefit from these deductions through to the new deadline of 30 June 2025.

The $20,000 instant asset write-off extension could be a significant boost for small businesses, providing immediate financial relief and encouraging ongoing investment in business growth and development.

Small business owners should monitor the legislative process to ensure they can take full advantage of these provisions once they become law.

Speak With Us

If you have any questions about this measure or if it would be suited for your business, why not speak with one of our trusted team for answers? We are here to assist you with any questions or enquiries you may have in the lead-up to the end of the financial year.

Business
advice

taxation
planning

compliance
services

News

Common EOFY Mistakes Made That Can Be Fixed Before 30 June

June 20, 2024

Finding yourself increasingly more busy as the EOFY approaches, particularly with meeting your tax obligations? It’s coming on tax time, so it’s time to ensure you’re prepared for your tax returns.

This period can be stressful and complicated, leading to common mistakes that can result in financial penalties or missed opportunities for tax savings.

Here’s a guide on avoiding common EOFY tax mistakes to ensure a smooth and efficient tax lodgement.

1. Errors in Claiming Deductions

Mistake: Many taxpayers either overclaim or underclaim deductions, which can lead to audits or missing out on tax savings.

Solution:

2. Incorrect Reporting of Income

Mistake: Failing to report all sources of income, including side gigs, investments, or rental income, can lead to discrepancies and potential audits.

Solution:

3. Missing Deadlines

Mistake: Missing the tax return filing deadline can result in penalties and interest charges.

Solution:

4. Incomplete or Inaccurate Documentation

Mistake: Submitting incomplete or inaccurate documentation can delay your return processing and potentially trigger an audit.

Solution:

5. Overlooking Superannuation Contributions

Mistake: Neglecting to make superannuation contributions or misunderstanding the rules can lead to missed tax benefits.

Solution:

6. Ignoring Tax Offsets and Rebates

Mistake: Not claiming eligible tax offsets and rebates can lead to higher tax liabilities than necessary.

Solution:

7. Failing to Review Past Returns

Mistake: Overlooking errors or missed claims from previous years can result in lost refunds or uncorrected mistakes.

Solution:

Avoiding common EOFY tax mistakes requires careful preparation, accurate record-keeping, and timely action.

By understanding deductible expenses, accurately reporting all income, meeting deadlines, maintaining comprehensive documentation, maximising superannuation contributions, claiming eligible offsets, and reviewing past returns, you can ensure a smoother, more efficient tax filing process.

If in doubt, consulting with a tax professional like us can provide peace of mind and help optimise your tax situation.