Are you planning on growing your business this year?
Growing your business can be an exciting yet daunting task. As a small business, we understand. It comes with a risk, but the reward for success is so sweet.
We hear from many of our clients that a challenge they face in growing their businesses is having access to sufficient funds and resources to facilitate that growth.
It may be your need a bigger van for deliveries, more tools and machinery to be able to take on more clients, a bigger coffee machine for the extra customers coming through your door, a new computer, chair and desk for your new hires or just a better photocopier for the team.
Using EOFY to your advantage
The good news is that you can use the EOFY to your advantage with the newly upgraded instant asset write-off.
The instant asset write-off has been with us for a few years now, and in a post-budget blitz, the scheme’s upper limit has been extended to $30,000, up from $25,000.
Even better, the write-off has also been extended to medium-sized businesses with a turnover of less than $50 million
The beauty of the scheme is that it allows small (and now medium-sized) businesses to claim an immediate tax deduction for eligible asset purchases rather than having to depreciate the cost over several years. This delivers immediate tax savings that can make an asset purchase more manageable on business cashflow.
What type of assets can be written off?
Most types of plant and equipment used in your business can be eligible for the instant tax write off. A new printer, a cappuccino machine, a tradie’s ute or a hairdresser’s reception desk are just some of the assets that can be claimed.
What’s the write-off worth?
This year sees three thresholds apply to the instant write-off depending on when you purchased a business asset.
The upper limits are:
- $20,000 for assets purchased between 1 July 2018 and 28 January 2019
- $25,000 for assets purchased between 29 January 2019 and before 7.30 pm 2 April 2019
- $30,000 for assets purchased between 30pm 2 April 2019 and 30 June 2020.
A key point is that the entire cost of the asset must be below the instant asset write-off threshold irrespective of any trade-in amount. So, if you buy a delivery van priced at say $40,000, it won’t be eligible for the write-off even if you pay $25,000 after trading in your current vehicle for $15,000. The van would have to be priced below $30,000 before any trade-in applies for it to be eligible for the write-off.
As your local Sydney small business experts, we can help businesses with any commercial loans and business finance needs.
When you’re in business, having the right finance and risk planning in place can mean the difference between thriving and surviving. As a local small business ourselves, we understand your needs. We can help you understand the finance options available and do all the legwork in sourcing the right business loan for your needs.
And no one is better placed to understand your needs than another small business owner.
Make an appointment to speak to your local small business finance expert who can answer your questions and help you find a suitable financial solution for your business’ current and future growth needs.