Increasing The Instant Asset Write-Off

Lifting the threshold to $150,000 (from $30,000) and expanding access to businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 31 December 2020. The threshold applies on per asset basis, so eligible businesses can immediately write-off multiple assets.

The Government is increasing the instant asset write-off (IAWO) threshold from $30,000 to $150,000 and expanding access to include all businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 31 December 2020. In 2017-18 there were more than 360,000 businesses that benefited from the current IAWO, claiming deductions to the value of over $4 billion.

The IAWO threshold

The higher IAWO threshold provides cash flow benefits for businesses that will be able to immediately deduct purchases of eligible assets each costing less than $150,000. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets. The IAWO is due to revert to $1,000 for small businesses (turnover less than $10 million) from 1 January 2021.

Eligibility:

The annual turnover threshold for businesses to deduct eligible assets has been increased to $500 million. Expanding the threshold will allow an extra 5,300 businesses to access the instant asset write-off scheme for the first time.

Timing

The threshold increase will apply from 12 March 2020 till 31 December 2020. Any new or second hand assets up to $150,000 each, used or installed ready to use during this period will be eligible for deduction.

Links to Government Resources

• Business.gov.au
• ATO.gov.au
• Treasury Fact Sheet