Tax breaks are something we all look forward to, and the $30,000 instant asset write-off scheme is more than welcome. However, there’s a lot of confusion on exactly how small businesses can use the write-off, and what it means to their business. So, here’s a clear, jargon-free “dos and don’ts” guide on how the new instant asset write-off scheme can be used to assist your business.
The $30,000 write off is a great opportunity for small and medium businesses to purchase work-related assets that can be written off in one go (assuming they are depreciating assets that cost $30,000 or under and are purchased between 2nd April 2019 and 30th June 2020). The scheme lets you invest in business assets and then decrease your taxable income in the same financial year.
Do – Invest in the digital evolution
Small businesses owners need to be more digitally engaged to reach more potential customers, and with the instant asset write off, it’s possible to invest in digital technologies that can boost your online presence and shape digital strategies that markets your brand in a powerful way.
You can use the write off to seek professional consultation for your business, or even invest in web solutions to enhance your website and its existing features in a manner that the online brand of your business simply takes it to another level. Expand your digital knowledge with Netstripes’s one-on-one Advisor Sessions which are fully funded by the New South Wales Government.
Next, browse the digital and innovation plans with your advisor and see what fits your needs.
There are several web solution plans that are created to cater to different stages of business development which incorporate brand building, social media management, digital strategies and website design. All of which can be claimed as an asset under the new scheme.
Do – Upgrade your office space/equipment
Whether you work from home, or at an office, chances are if you’re managing a small business, you probably have had your equipment for quite a while now. Most of us can’t afford to regularly upgrade equipment like photocopiers, the latest computer processors, outdoor equipment and so on. The write off also applies to second-hand equipment and vehicles.
So, this is the ideal opportunity to purchase the much-needed equipment that you’ve had your eye on. But, before you start making a list of essential things you need under $30,000 and then start crossing off the not-right-now equipment; here’s another mind-blowing fact – the write off applies to MULTIPLE ASSETS as long as each individual asset costs less than $30,000.
Do – Speak to an accountant
You read that correctly. If you are as confused as the rest of us when it comes to the tax schemes, always double check with your accountant or a tax advisor so you have a clear idea of what options are available to you. We spoke to international accounting firm Grant Thornton and were amazed how many things most businesses owners, including ourselves weren’t aware of. If you would like to know more about our discussion with Grant Thornton, click here.
Don’t – Double dip
No, I’m not talking about chips and dip here. With all the confusion regarding the new schemes, it’s not uncommon for people to claim the $30,000 instant write off on assets and then list the purchases as a depreciating asset in later tax years. This is done simply because most people are unaware of what is eligible or what is not. That’s why talking to an accountant is really important when you’re using the write-off.
Don’t – Waste it on short term fulfilment
This is a big one! The instant write off can help you achieve big things when it comes to your building your business, but always make sure that whatever you are investing in, that it provides long term stability and value to your business, and not just short term gratification. This is a big trap to avoid. Always look to the future when making business-related decisions or ask for some help along the way. It never hurts to get some good advice.
There are a lot of good things to look forward to with the new tax scheme, and many of us are thrilled to be able to inject funding into our business. Just make sure that your investment is worthwhile, and that you heed the advice of professionals when it comes to making smart money choices. Hopefully this clear ” dos and don’ts” guide has helped you make better decisions with the $30,000 instant asset write off.
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