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Right now the government is throwing money at businesses to help prop up the economy. One of these benefits has to do with a huge increase in the instant asset write-off threshold.
From the business.gov.au website:
The instant asset write-off threshold has been increased from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million). This applies from 12 March 2020 until 30 June 2020, for new or second‑hand assets first used or installed ready for use in this timeframe.
The full article can be seen here:
https://www.business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business/instant-asset-write-off
I’m no accountant, but I can tell you there is quite a large financial benefit in being able to instantly write down an asset worth $150,000 versus depreciating it over time (that did sound a bit accountanty, eh...).
From what I can see, the government wants you to think of an asset as a car, a tractor, or a piece of machinery. Well, they’re the examples I found on their websites. So, I wanted to give you a few examples of how clients of ours are using the instant asset write off, and it’s not tractors!
The simplest one to explain is a transactional website (ecommerce), which is a site that has the ability to process financial transactions. If you are planning a new website, please do your research on whether you are eligible for the instant asset write-off threshold.
Next is a CRM or database build. (If you didn’t know, Customer Relationship Management (CRM) are technology platforms for managing all your company’s relationships and interactions with customers and potential customers). While the licenses for existing platforms might not be eligible, there’s usually a lot of tailoring of these systems that should be. For example, we’ve built specific assets, being custom CRMs or customer databases. Again, we have seen instances where the instant asset write-off threshold applies to these builds. This write-off may also apply to any integration work that may need to be done to improve your existing technology stack (for example get your ecommerce website talking to a Marketing Automation platform, or get your CRM talking to your accounting platform).
So, as everyone is needing to up their digital game right now, please speak to your accountant about your eligibility for instant tax benefits. Don’t use this article as your final decision making, do your own research to find out if you are eligible. Take my advice on tech, but please don’t listen to my accountanty talk...