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Recently the Federal Government pledged to increase the small business instant asset write-off from $20,000 to $25,000. This will apply to businesses with an annual turnover of less than $10 million for purchases made prior to 30 June 2020. This write-off was due to expire at the end of the current financial year, so the extension will be welcomed.
With a federal election looming, the government is no doubt implementing this change as part of their strategy to entice the small business sector.
The $25,000 instant asset write-off will improve cash flow by bringing forward tax deductions, providing a boost to small business activity and encouraging more small businesses to reinvest in their operations and replace or upgrade their assets," the Prime Minister's office recently told Accountants Daily.
Often, many small businesses don't have the available cash flow to take advantage of this government boost. A solution can be sourced via smart finance structure such as a chattel mortgage which provides access to the assets required by the business. This allows immediate tax benefits with repayments spread over the working asset life at very competitive pricing.
If this sounds like something you would like to know more about, please contact Prosperity or call our Head of Leasing and Lending, Alex Warian, on 02 8262 8756.