SME lender OnDeck Australia is urging SMEs to act fast to secure finance ahead of 30 June 2019 to take advantage of the $30,000 instant asset write-off in the current financial year.
As part of the 2019/20 Federal Budget, the instant asset write-off was given an uptick to $30,000 effective 7:30 pm AEDT on 2 April 2019, and expanded to include businesses with a turnover of less than $50 million, up from $10 million previously.
Federal Government figures confirm that over 350,000 businesses have taken advantage of the instant asset write‑off. A far greater number – 3.4 million SMEs, stand to benefit from the new rules. Independent research by SME lender OnDeck Australia confirms that over eight of ten (84 per cent) of small-businesses owners are aware of the instant asset write-off. However, two out of five were concerned that the write-off would end with a change in government.
Cameron Poolman, CEO of OnDeck Australia, said, “A more certain political environment together with the enlargement and expansion of the instant asset write-off, means SMEs can now invest in their business with certainty, while benefiting from tax savings to aid cash flow.”
Finance the key to making asset purchases
SMEs often need finance to purchase eligible assets, and this can be an uncertain and time-consuming process when businesses rely on bank funding. OnDeck found one in four SMEs have been knocked back for bank finance in the past. Among those that have successfully acquired funding, 29 per cent say their business was negatively impacted by the time taken to secure finance.
“With 30 June just around the corner, time really is of the essence. I urge SMEs to act fast to take advantage of the write-down. It’s not just about tax savings. It’s an opportunity to strengthen your business through increased productivity and efficiency,” said Poolman.
Other key points to note about the $30,000 instant asset write-off:
- The threshold has increased to $30,000 and been extended to 30 June 2020.
- The instant asset write-off now also includes businesses with a turnover less than $50 million.
- Eligible SMEs can claim a deduction of up to $30,000 for the business portion of each asset (new or second hand), purchased and installed ready for use from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020.
- The entire cost of the asset must be less than the instant asset write-off threshold, irrespective of any trade-in amount.
- The write-off can be claimed for multiple asset purchases.