Instant Asset write-off level (probably) to be Increased

The instant asset write-off level is the amount of expenditure a small business can spend on the acquisition or improvement of an asset and get an instant tax deduction for the whole amount.

Over recent years this level of expenditure has varied a number of times. During the COVID period, for most businesses, the expenditure amount was unlimited.

For the current financial year, the instant asset write-off level was to be $20,000 (excluding GST). However, recent amendments to the proposed law are set to increase the amount to $30,000 (excluding GST). At the time of writing, this level of expenditure has still not yet passed parliament, but it is very likely to do so during May 2024.

It is further proposed that any business with a turnover of less than $50 million (not $10 million) will be able to access the $30,000 write-off amount.

But here’s the important part – the asset must be installed and ready for use by midnight on 30 June 2024. So, if you want to make use of the concession, get your skates on! You must make sure that your asset is delivered and set up for use by this time. You don’t need to have paid for the asset by this time, but it must be capable of being used by this time.

Under the current law, the instant asset write-off level will revert to just $1,000 as at 1 July 2024. Nevertheless, watch out for changes to investment tax incentives in the Federal Budget which will be announced on 14 May 2024.