The Government is backing businesses to invest to help the economy withstand and recover from the economic impact of Coronavirus. The two business investment measures in this package are designed to assist Australian businesses and economic growth in the short-term, and encourage a stronger economic recovery following the Coronavirus outbreak. These measures will support over 3.5 million businesses with aggregated annual turnover of less than $500 million employing more than 9.7 million employees.
INCREASING THE INSTANT ASSET WRITE-OFF
In March this year the federal Government announced that the instant asset write-off would increase from $30,000 to $150,000, and it expires at the EOFY. You have an opportunity to take advantage of this new threshold of $150,000 applying for a limited time only for depreciating assets first used or installed ready for use between 12 March 2020 and 30 December 2020. The Instant Asset Write Off scheme allows business owners to immediately write off depreciable assets that cost the business less than $150,000.
For example, you could purchase a new heavy vehicle trailer or a light/medium rigid vehicle and immediately write off its cost. For more information see: https://www.ato.gov.au/Business/Business-bulletins-newsroom/Medium-business/Instant-asset-write-off-expansion/
The second initiative is BACKING BUSINESS INVESTMENT (BBI)
The Government has introduced a time limited 15 month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions.
The key features of the incentive are:
• benefit — deduction of 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost;
• eligible businesses — businesses with aggregated turnover below $500 million; and
• eligible assets — new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997 (i.e. plant, equipment and specified intangible assets, such as patents) acquired after announcement and first used or installed by 30 June 2021. Does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.
Timing: Applies to eligible assets acquired after announcement and first used or installed by 30 June 2021
For more details on both of these initiatives head to the Government website –