These changes will provide further assistance to SME operators in managing their cash flow. Freeing up cash to drive business growth, recruiting more staff or upgrading equipment are all critical to running a business. The difference a new van, fridge, or an industrial oven can make to day-to-day operations is not just a benefit at tax time.
But the further advantage of claiming the instant asset write-off is that eligible business owners will get a one-off cash injection upfront in the year of purchase (However it is important to understand the 'instant asset write-off' claim must be made in the year in which the asset is purchased.)
Moreover, if a business owner buys an asset that will be used part of the time for personal reasons; the owner can only claim the write-off for the portion of the asset used in the business.
For example, if a vehicle is used 75 per cent for business and 25 per cent for personally, the instant write-off can only be claimed for 75 per cent of the purchase price.
We’ve broken down the key features of the legislation in the infographic below.