Now 2020 is firmly in the rear-view mirror, it is time to map out what’s ahead for Australian manufacturing is going. Clare Sainsbury, Angus MacDonald and Colin White of AMTIL corporate partner Interlease look at how manufacturers can set themselves up for the future with the Government’s Instant Asset Write-Off scheme.
At Interlease, we believe that manufacturing will be firmly in the driver’s seat in leading the Australian economy to not just recover but grow and thrive in the post-COVID world. To do so, it is imperative that all businesses have the tools available to them to help them succeed.
In June 2020, the Government announced it would be increasing the Instant Asset Write-Off threshold from $30,000 to $150,000. On 6 October it went one step further and removed the threshold altogether, meaning any asset, new or used, could be immediately depreciated up until 30 June 2022.
The scheme is available to all businesses that have an aggregated annual turnover of less than $50m. Small businesses with an aggregated annual turnover of less that $10m can also deduct the balance of their simplified depreciation pool at the end of the income year.
As an example, if a business purchased a new or used machine today valued at $500,000, this would be eligible to be 100% written off against your business profits. Assuming a company tax rate of 27%, your tax payable in the 2021 Financial Year would reduce by $135,000. (This is not tax advice, and readers should seek the opinion of a financial advisor for clarification of eligibility and suitability.)
Interlease is both excited and well positioned to facilitate your equipment finance requirements associated with such purchases.
Interlease is one of Australia’s leading business finance broking firms. To discuss the finance options that best suit your business, contact Interlease and learn more about our solutions.
Clare Sainsbury: 0450 167 619
Angus Macdonald: 0459 864 726
Colin White: 0498 145 934