The Australian government made changes to tax write-offs and temporary full expensing. For laundry equipment purchased before December 31 - make sure you make the most of the changes. For equipment purchased after then (and before June 30, you might be able to take advantage of recent changes. Make sure you contact your tax professional for advice on these changes and your eligibility (some of us are only simple marketing people).
Go here for more information from the Australian Tax Office itself.
Instant write-offs; what are they?
Eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use.
Instant asset write-off can be used for:
- multiple assets, if the cost of each individual asset is less than the relevant threshold
- new and second-hand assets.
For assets first used or installed ready for use between 12 March 2020 until 30 June 2021, and purchased by 31 December 2020, the instant asset write-off:
- threshold amount for each asset is $150,000 (up from $30,000)
- eligibility extends to businesses with an aggregated turnover of less than $500 million (up from $50 million).
You will need to check if your business is eligible. Eligibility is based on the aggregated turnover (or ordinary income) of your business, the date you purchased the asset when it was installed or first used, and the cost of the asset being lower than the threshold. See here for a detailed look at the thresholds.
What if you didn't purchase before 31 December?
The ATO website says:
From 7:30 pm AEDT on 6 October 2020 until 30 June 2022, temporary full expensing allows a deduction for:
- the business portion of the cost of new eligible depreciating assets for businesses with an aggregated turnover under $5 billion or for corporate tax entities that satisfy the alternative test
- the business portion of the cost of eligible second-hand assets for businesses with an aggregated turnover under $50 million
- the balance of a small business pool at the end of each income year in this period for businesses with an aggregated turnover under $10 million.
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