How the 2020 Federal Budget affects your business (Part 3)
the enhancement to the instant asset write-off scheme.
enhancements to the tax write-off provisions for business losses.
What is the instant asset write-off scheme?
The instant asset write-off scheme allows eligible businesses to immediately claim tax deductions for eligible business assets purchased. The scheme had already been enhanced soon after COVID-19 first impacted the Australian economy in early 2020, and it has been further enhanced in the October Budget.
Under the latest enhancement, businesses with an annual turnover of less than $5 billion will be able to write off the entire cost of any business asset purchased as a tax deduction after 6 October 2020 in the 2020/21 and 2021/22 financial years. There is no limit to the amount that can be claimed.
Prior to the Federal Budget, eligible businesses could only deduct assets purchased before the end of 2020 up to the value of $150,000, and only in the 2020/2021 financial year. Common assets that are written off include business vehicles and equipment.
Enhanced write-off provisions for business losses
If your business has a turnover of less than $5 billion and you make a loss in the 2019/2020, 2020/2021 and 2021/2022 financial years, you can write that loss off against any tax you’ve paid in the 2018/2019 or subsequent financial years. This will enable you to get a tax refund if you make a loss during this time.
How we can help
At Scorpion Bookkeeping, we can help you to implement Xero bookkeeping software to help you keep all you manage the financial aspects of your business. We are a Xero-certified partner.
We provide bookkeeping support services to a diverse range of clients in South Australia, Victoria and New South Wales.
Contact us today for a free, no-obligation consultation to find out how we can help your business!