With the end of financial year approaching it is time to look at opportunities to reduce tax, including the instant tax write off for new asset purchases.
Under the current instant asset write-off scheme, eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used, or installed ready for use, up to a value of $150,000.
Provided that each individual eligible asset is valued at $150,000 or less, multiple assets totalling more than $150,000 can be claimed under the scheme. However, it is important to note that while the scheme is designed to reduce the amount of tax your business pays, if it is structed as a ‘company’, the most you would be eligible to save would be 27.5% for small businesses or 30% for large businesses.
With this year’s season kicking off to a good start in much of eastern Australia, it’s a good idea to look into capital purchases you were already considering – spending for the sake of spending doesn’t make good business sense, especially when you are spending on depreciating assets.
While machinery is always the first place most farmers look to reduce taxable income, there are other opportunities including looking at new technology for data capture and reporting, the instant asset write-off could be your best opportunity at recouping some of the initial outlay for these new technologies. The return on investment for cloud-driven technology that will give you real time insights and allow for quicker and easier decision making, will pay off year after year.
SAGM Finance can help find the best products and prices for your asset finance. You can call Katherine on 0400 277 420 for further assistance