Budget measure for companies, full expensing and instant asset writeoff

Amaris on 07/10/2020 - 11:59
Last edited 07/10/2020 - 11:59

In yesterday's budget Mr Frydenburg said that the govt. was to allow companies with turnover up to 5billion to write off the full cost of eligible assets of any value in the year they are installed, provided they are used by 30 June 2022. Websites also report that the instant asset write-off that was already in place has been extended to 30 June 2021.
Could someone explain why the instant asset write-off just isn't a subset of the first measure? If it is a subset, why are they mentioning is separately, with a different end date? Confused!

Thanks

Financial

Comments

  • Unorthodox on 07/10/2020 - 12:29
    +1

    Part 1: the overarching program has been extended by another year
    Part 2: eligibility now covered firms with $5bn turnover which covers 99% of companies.
    Previously this was limited to companies with less than $500m turnover (expanded from $50m) with the covid response

    • Amaris on 07/10/2020 - 13:07

      According to this news items the temporary full expensing scheme doesn't have an upper limit to the value of the asset and companies with turnover less than 5 Billion qualify. The confusion I have is why the 'instant asset write-off would have a limit of 150,000. Wouldn't (almost) all companies be able to now be able to use the new (temporary full expensing scheme) and not be limited by the $150,000 limit?

      https://business.nab.com.au/2020-federal-budget-what-it-mean….

      • netjock on 07/10/2020 - 13:43

        150k per asset, unlimited number of assets.

        To have a $5bn revenue business and end up being able to write of $150k would be a joke.

        For most legit businesses instant asset write off only serves to push forward any purchases it doesn't magically create a clone and you end up buying an extra HiLux.

        You can be assure this is basically another HiLux and Ranger Grant. If you are a builder you might push forward replacement date for that Bobcat but you won't buy a second one because of the tax write off but what you will start thinking is buying that expensive Landcruiser rather than having to do with something less.

        • Amaris on 07/10/2020 - 21:29

          Under the new scheme, there's no upper limit to the value. The $150,000/- is for the existing instant asset write off.
          Still trying to figure out why they're still having two separate schemes when (to me) the new scheme encompasses all the inclusion criteria (and more) of the existing one.

  • whooah1979 on 07/10/2020 - 13:47

    allow companies with turnover up to 5billion

    This is great news for all the <5b zombie companies.

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