Instant Asset Write-Off Scheme
On 12 March 2020, the Australian Federal Government released an economic stimulus package in response to the worldwide coronavirus pandemic COVID-19, which included changes to the instant asset write off scheme that would last until 1 July 2020.
The instant asset write-off threshold was increased with immediate effect from $30,000 to $150,000 for businesses with an aggregated annual turnover of less than $500 million (up from $50 million), until 30 June 2020.
The instant asset write-off applies to new or second-hand assets first used or installed ready for use in this timeframe. The threshold also applies on a per asset basis, so eligible businesses can immediately write-off multiple assets, thereby providing cash flow benefits to these businesses.
On 9 June 2020, the Federal Treasurer announced that the current expansion of the instant asset write-off scheme, which was due to end on 1 July 2020, will be extended until 31 December 2020. All other conditions remain the same.
From 1 January 2021, onwards the asset threshold will revert to $1,000 and the instant write-off will only apply to small businesses with an aggregated turnover of less than $10 million.
The thresholds have changed over the last few years with the complete list available on the ATO website. Small businesses that choose to use the simplified depreciation rules, must use the instant asset write-off scheme on all eligible assets.