SME Instant Asset Write-off $6,500 back to $1,000 After 1 January 2014

scotty on 19/12/2013 - 00:40

I think it applies to those of us who run small business (less than $2 million turnover). Labor government raised the instant asset write-off to $6,500 back in July (from $1,000). Otherwise your acquired assets would be going through tedious depreciation process (see ATO document).

I found that incredible useful. My current laptop had to go through the depreciation (ThinkPad T410, where I did most of the work on OzBargain) and I was planning to buy a new one early next year. Almost all the new business laptops I am interested in are over $1,000 so instant asset write-off increased to $6,500 would really help, i.e. I could put the entirety as expense for this financial year.

… HOWEVER, looks like the new Federal government is scrapping it (to ease our ever-increasing debt), and instant asset write-off would be reverted back to $1,000 after 1 January 2014!!

Well, I won't post it as a "deal" under the Business category (side note — government initiative as deals are still debated), but if you run a small business, make your $1,000-$6,500 purchases before 1 Jan next year to save a bit of tax this year and less headaches.

I can't seem to be able to find the legislation change notice on ATO's website, but lots of articles when you google it.

Financial

Comments

  • TheAviator on 19/12/2013 - 01:24

    Very disappointed with the reversion, it seemed like a really good step forward to help small businesses. :(

  • timetoquit on 19/12/2013 - 02:52

    Wow I'm gutted!! So little time left too!

    Thanks Scotty for the heads up!

  • Rod Fay on 19/12/2013 - 08:31

    Yep Scotty is correct, legislation has been written , not yet passed but even if delayed will have an effective date of 1st Jan 2014: see link http://www.taxreporter.com.au/articles/featured-articles/did…

    The catch is the asset must be installed ready for use to get the concessions, so don't go out and order something if you cannot have it in place ready to use before 1st Jan.

  • Blockey on 19/12/2013 - 08:55

    It's a shame it's going, it's a good concession and it simplifies things for small business owners.

    Just be aware that this concession is just a timing difference. You will save tax this year but in future years you will pay slightly more tax. Over time you will see no difference in the end tax paid assuming you make a similar profit every year and the tax rates don't change.

    Not knocking the concession at all though, I'm all for using it as there is certainly a time value of money benefit but I wouldn't advise impulse buying things you don't need just to get the concession.

  • zhenjie on 19/12/2013 - 18:45

    Very disappointed to see it go as well. It was a great incentive for Small Business owners to invest and spend. Would have thought everyone wins.

  • [Deactivated] on 24/12/2013 - 21:40

    The government needs more taxes apparently…

    $500 bn deficit forecasted…

    Everything is taking a hit, even public hospitals are gouging by asking for private health insurance to be used. This only gets you a private room and you can select a public doctor, but means that our health insurance premiums go up.

    Notice how the large price hike in private health insurance happened right this year when it was introduced!

  • zhenjie on 11/07/2014 - 15:33

    Since the second attempt at the repeal didn't go through in March, whats the status of this write-off? Anyone follow the politics behind it?

    • scotty on 11/07/2014 - 21:52
      +1

      Still not sure what's going on. There's a possibility that $6,500 would stay but it's just too confusing at the moment to say that it's a definite. For myself I have been holding off buying a laptop for the first half of this year. Finally decided on one last week so it would be included in the financial year 2014-2015. I'll let the accountant to figure out how to file it in May 2016…

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