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FINANCE

Equipment Finance

Financing a jetter or camera is a smart way to purchase your new equipment for your company. It reduces the cashflow stress on the business and enables you to start charging the equipment out and making money at very low monthly payments. With interest rates at an all time low, there has never been a better time to finance your equipment.

Call us today to discuss your finance requirements Ph: 02 9674 9088 or call Brett directly from Finance At Work on Ph: 0402 044 034.

 

Cam and Jet Package.JPG  Raptor water jetter

 

 

Assett

Instant asset write-off thresholds

Using the simplified depreciation rules, assets costing less than the relevant instant asset write-off threshold are written off in the year they are first used, or installed ready-for-use. This threshold applies to each asset irrespective of whether the asset is purchased new or second-hand.

The threshold has changed over the last few years and during the current year. The entire cost of the asset must be less than the instant asset write-off threshold, irrespective of any trade-in amount. Whether the threshold is GST exclusive or inclusive will depend on your GST status, for further information about GST impacts see Cost.

In working out the amount you can claim, you must subtract any private use proportion. The balance (that is the proportion used in earning assessable income) is generally the taxable purpose proportion. While only the taxable purpose proportion is deductible, the entire cost of the asset must be less than the threshold.

Note that if you later sell or dispose of an asset for which you claimed an instant asset write-off, you include the taxable purpose proportion of the amount you received for the asset in your assessable income.

Example 1: Purchasing multiple assets

Barry owns a plumbing business. On 10 April 2019, Barry purchases and starts to use a new van for his business valued at $22,000. The following month he purchases and starts to use a trailer to support his business which costs him $14,000. Barry has spent a total of $36,000. As the $30,000 instant asset write-off threshold applies to each asset, Barry is able to claim both the van and the trailer in his 2019 tax return.

Example 2: Exceeding the threshold

Daryl owns an electrical business, Daryl’s Electrical, which qualifies as a small business. The business purchases a ute for $40,000 on 28 July 2017. Daryl estimates the ute will be used 40% of the time for his business.
Even though the value of the ute to the business is $16,000 ($40,000 × 40%), Daryl can't immediately write it off. Instead he adds the $16,000 for the ute to Daryl’s Electrical small business pool.

Example 3: Immediate write-off

On 18 May 2018 Fiona buys a new powerful computer for $6,800 that she uses 80% of the time for business purposes and 20% of the time for personal purposes. She also bought a new printer for $700 which she uses for 100% of the time for business purposes. For the computer, Fiona calculates her instant asset write-off as 80% (the business use proportion) of $6,800, so she claims $5,440. For the printer, she claims the entire cost of $700.

Small business entity simplified depreciation field - Question 10 on tax return.

Fiona includes the combined amount of $6,140 at label A of the Business and professional items schedule which is filled out when completing her tax return.

For more information, please see: https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/In-detail/Depreciating-assets/Simplified-depreciation---rules-and-calculations/?page=4#Instant_asset_write_off_thresholds

 

 

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