Generic image of tradesman tradie holding tools and hardhat, wearing tool belt. ONE USE ONLY.
Generic image of tradesman tradie holding tools and hardhat, wearing tool belt. ONE USE ONLY.

$150,000 tax deductions here to stay … for now

ALL but the largest Queensland companies will be able to deduct cars, utes, tools and more equipment valued at up to $150,000 until the end of the year, as the instant asset write-off gets an extension.

Almost 700,000 Queensland businesses will be eligible to cash in on the massive tax write-off.

Treasurer Josh Frydenberg will announce the new lease of life for the program today, after the scheme was first supercharged in March in the first wave of coronavirus stimulus.

It's understood the supercharged instant asset write-off would have had a slower take-up this financial year, as companies struggled with cashflow during the height of the virus.

 

Treasurer Josh Frydenberg will announce an extension of the $150,000 instant asset write-off today. Picture: AAP Image/Mick Tsikas
Treasurer Josh Frydenberg will announce an extension of the $150,000 instant asset write-off today. Picture: AAP Image/Mick Tsikas

The $30,000 asset write-off was increased five-fold to $150,000 in March, but it was only meant to continue until the end of this month.

But, they will now be able to claim the tax deduction until the end of December.

As well as cash flow issues, there have also be difficulties with companies being able to access investments as they deal with delays from supply chain issues.

The additional cash splash follows the dire forecast that Australia would enter a recession in the June quarter for the first time in almost 30 years.

Mr Frydenberg said the $300 million extension of the write-off was intended to boost the economy in the short term, as pandemic restrictions ease and businesses begin to reopen.

"The extension will also give businesses additional time to acquire and install assets, as they will now have until the end of the year," he said.

"Assets can be new or second hand and could include for example a truck for a delivery business or a tractor for a farming business."

Businesses will be able to claim deductions on asset purchases including tools, cars, utes, tractors and other equipment. Picture: supplied
Businesses will be able to claim deductions on asset purchases including tools, cars, utes, tractors and other equipment. Picture: supplied

A previous round of the asset write-off, in 2017-18 capped at $20,000, was taken up by 85,000 Queensland businesses who spent just over $1 billion, according to Treasury data.

The average deduction was about $12,000 at that time.

Figures are not yet available on the take up since March, as deductions will not be claimed until the 2019-20 tax returns.

Businesses with a turnover of less than $500 million are eligible to claim the deduction.

Originally published as $150,000 tax deductions here to stay … for now


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