End of the instant asset write off: what does it mean for your business?

The instant asset write off program, introduced in 2015, has been a popular initiative, allowing SMEs to immediately write off the cost of assets valued up to a certain amount, rather than depreciating them over time.

What is changing?

From July 1, 2023, small businesses will have to depreciate any assets they purchase worth more than $1,000 over the effective life of the asset.

Should I try and use the instant asset write-off program before it ends?

If your business doesn’t need to write off assets this financial year, then you can save your depreciation for when it’s needed. It is best to seek professional advice if you are unsure what to do.

If you do want to use the program, then make your eligible purchases now. Supply chain issues may affect your businesses’ ability to access the instant asset write-off. Remember, you must ensure that the asset is installed and ready for use by June 30, 2023, to claim the write-off.

Examples of assets that you can claim for under the instant asset-write off scheme

Here are some examples of assets that you can claim as an immediate deduction under the instant asset write-off scheme:

• Tools: lawn mowers, hammers, axes
• IT hardware: laptops, tablets, printers, scanners
• Office and shop furniture, lighting, and fittings
• Air conditioners
• Office cars (Can be claimed up to the value of $150,000 – but there are rules in place regarding the instant asset write-off for motor vehicles.)

The instant asset write-off scheme covers most types of depreciating assets, but there are a few exclusions.

Reintroduction of the old depreciation rules

The end of the instant asset write-off program means that businesses will need to reintroduce depreciation rules. These can be complex and are more onerous, with the potential for more red tape to be involved.

We can help

Running your own business can be challenging. If you need to discuss the end of the instant asset write-off program and how it affects you, call us on 1300 513 332 or make an enquiry here and we’ll put you in contact with your local TaxAssist Accountant. We offer free initial consultations.

TaxAssist Accountants can help with all financial aspects of running your business from Year End Accounts, Tax Returns, Bookkeeping, BAS Returns, and Payroll, as well as Cashflow Projections, Superannuation, Business Plans, Employment Law, Debt Recovery, Capital Gains Tax, Audits and more.

Date published 11 Mar 2023