Time to think big as government extends $20,000 asset write-off to more businesses
The taxman has smiled upon Australian businesses planning to spend up big on new computers and other expensive technology.
This time last year, the federal government introduced a new scheme to encourage small businesses to open their wallets, letting businesses with an annual turnover of less than $2 million write-off major purchases up to $20,000 in one year rather than three.
Now it’s been extended to businesses turning over up to $10 million, opening up a range of opportunities.
The scheme is available to anyone with an Australian Business Number. It doesn’t just apply to technology, it also extends to office equipment, tools, machinery, vehicles and most other business assets. Nor does it apply to just one purchase – there’s no spending limit as long as each item is under $20,000.
Remember, you’re not actually getting more money back from the taxman, you’re just getting your money back sooner so you can pump it back into the business.
Previously this deal was only available on purchases up to $1000, which meant that it typically didn’t apply to buying new desktop and notebook computers, or fitting out a server room.
Boosting the threshold to $20,000 is great if you’re planning a business-wide hardware refresh but it also makes it tempting to fast-track investments in a range of new technologies – from 3D printers and CNC machines for rapid prototyping to automation tools and even small industrial robots.
The whole idea is to encourage businesses to bring forward investments and innovations designed to improve their efficiency, increase productivity, open up new opportunities and boost their bottom line. You’ll need to crunch the numbers but if you’ve got big plans for the next few years now might be the time to act.
While the budget has expanded the scheme to cover more businesses, it hasn’t extended the deadline and it still expires on June 30, 2017. If you’re quick you might be able to take advantage of it in the 2015-16 financial year as well next financial year.
As always it’s a good idea to chat with your accountant before taking advantage of tax benefits. Don’t spend money just for the sake of it as you’re not actually getting a discount just a faster rebate.
Used wisely, the new tax rules might let you spend up big on tech to give your businesses a major shot in arm.