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As part of the 2020-2021 Federal Budget, the Australian Government announced an increase in the instant asset write-off by removing the $150,000 per asset limit in response to the economic impact of the coronavirus; it has been extended to 30 June 2021 under the budget released in early May 2021.
There is no better time than now to invest in a high quality safe from Safeguard Safes to increase your workplace security and protect your important business valuables such as private confidential documents, credit cards or cash, expensive smart devices such as laptops & mobile phones away from the threat of theft and fire.
Many Australian businesses that want to purchase new assets or upgrade existing assets have already taken advantage of this 100% immediate tax deduction and realise the tax benefits to be gained in the current tax year.
The instant asset write-off scheme enables you to write off the entire amount of asset purchases in the same financial year they were purchased. The scheme has been expanded to apply to businesses with an aggregated turnover up to $5 billion annually. Previously businesses purchasing an asset could only write off a portion of an asset expense over several years but now they can deduct the full expense in a single year, this may allow you to decrease your taxable income at tax time.
How does the instant asset write-off work in 2021?
The 2021 instant asset write-off works as follows: in 2021 you can claim a deduction on your tax return for the full cost of an asset in the year that it’s purchased and installed. This applies to a range of assets, including:
- Tools and machinery
- IT hardware – computers, laptops, monitors, printers
- Machinery and equipment
- Office and shop furniture and fittings
- Security Safes and Fire Resistant Filing Cabinets
- Signage
- Air conditioners
- Motor vehicles
So when you purchase an asset for business use, you don’t have to depreciate it and claim the costs over time.
See to following example of the instant asset write-off in a sales transaction made
Luke operates a retail store and wants to upgrade to a new higher security safe . On 15th April 2021, he buys a new security safe for $4,000, exclusive of GST, and had it installed and operating by 26th May 2021. At the small business company tax rate of 27.5 per cent, Luke will reduce his tax bill as a result of the purchase.
Some other important information regarding the tax claim
- The asset purchase can be new or used.
- The deduction needs to be made in the financial year that you’ve purchased or installed the asset for business purposes.
- There’s no limit to how many assets you can purchase.
- We suggest you make your own inquiries direct to the ATO or consult your accountant to confirm your tax entitlements.
If you wish to take this great opportunity and invest in a safe today, browse our extensive range of safes to select the one that best suits your business needs. We have the largest online selection of security safes and vaults in Australia. If you have any questions, just give us a call on 1300 764 971, and one of our friendly safe experts would be glad to help you.
