- You are in a position to purchase an asset or have purchased an asset for your business,.(Tax write offs, up to $150,000)
- You are in a position to make prepayments on expenses for next year
- You are having trouble financing your tax obligations
- You are in a position where you can delay invoicing till after 30 June 2020 (reduce your income)
Note: It has been announced that this will be increased till the 31 Dec 2020, but at the time of this post, legislation has not yet been passed.
- check if you’re an eligible business
- both new and second-hand assets can be claimed, provided each asset costs less than $150,000
- assets must be first used or installed ready for use between 12 March and 30 June 2020
- a car limit applies to passenger vehicles. The limit is $57,581 for the 2019–20 income tax year
- if your asset is for business and private use, you can only claim the business portion
- you can claim a deduction for the balance of your small business pool if it’s less than $150,000 at 30 June 2020 (before applying depreciation deductions)
- different eligibility criteria and thresholds apply to assets first used, or installed ready for use, prior to 12 March 2020.
- Instant asset write-off for eligible businesses
- Exclusions and limits – how the car limit applies to vehicles
- Simpler depreciation for small business
- your aggregated turnover (the total ordinary income of your business and that of any associated businesses)
- the date you purchased the asset
- when it was first used or installed ready for use
- the cost of the asset being less than the threshold.
- Less than $500 million aggregated turnover
12 March 2020 to 30 June 2020 (see note)
- Less than $50 million aggregated turnover
7.30pm (AEDT) on 2 April 2019 to 11 March 2020 $30,000
- Less than $10 million aggregated turnover 29 January 2019 to 7.30pm (AEDT) on 2 April 2019 $25,000
- Less than $10 million aggregated turnover 1 July 2016 to 28 January 2019 $20,000
- Less than $2 million aggregated turnover 7.30pm (AEST) on 12 May 2015 to 30 June 2016 $20,000
- Less than $2 million aggregated turnover 1 January 2014 to prior to 7.30pm (AEST) 12 May 2015 $1,000
- Less than $2 million aggregated turnover 1 July 2012 to 31 December 2013 $6,500
- Less than $2 million aggregated turnover 1 July 2011 to 30 June 2012 $1,000
EXCLUSIONS AND LIMITS
- Deferring by up to six months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise
- Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
- Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
- Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities
- Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.
- it is ‘excluded expenditure’ or
- ‘the 12-month rule’ applies
WHAT IS ‘THE 12-MONTH RULE’?
- the payment is incurred for an eligible service period not exceeding 12 months
- the eligible service period ends in the next income year.
WHAT IS ‘EXCLUDED EXPENDITURE’?
- amounts of less than $1,000 (excluding input tax credits)
- amounts required to be incurred by a court order or law of the Commonwealth, state or territory
- payments of salary or wages (under a contract of service)
- amounts that are capital, private or domestic in nature (except certain research and development amounts)
- certain amounts incurred by a general insurance company in connection with the issue of policies or the payment of reinsurance premiums.