Mining businesses eligible for $30k Instant Asset Write-Off

With the end of financial year fast approaching, small and medium-sized mining businesses are being reminded they could be eligible for an instant asset write-off of up to $30,000.

The Federal Government boosted the threshold on the Instant Asset Write-off Scheme last month, in a move designed to stimulate growth for small and medium-sized business.

The program is for small to medium mining businesses with an annual turnover of up to $50 million (up from $10 million previously), and it can be used multiple times for multiple assets.

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WA Asset Finance Broker Robert Perks says by taking advantage of the scheme before June 30 this year, businesses can invest in the equipment they need now and claim the full purchase price as an immediate deduction this financial year.

“The scheme allows business owners to immediately write off depreciable assets that cost the business less than $30,000 plus GST,” said Mr Perks.

“The scheme would be especially beneficial to industries such as mining and construction, or trades and services, commercial property owners and small-to-medium sized businesses which are dependent on replacing business and fleet equipment, vehicles, solar energy systems for commercial property owners and farming and agriculture,” he said.

Mr Perks said many businesses were unaware of the initiative so urged them to look into it.

“It’s for new or second-hand assets ‘first used or installed, ready to use’ between April 3rd, 2019 and June 30, 2020,” said Mr Perks.

“If businesses are thinking of making a purchase, they ought to do it now, before end of the financial year – but seek help from a professional to make sure they’re not directly affecting business cash flow,” he said.

Instant Asset Write Off – Assets that are eligible include:

Work vehicles:

• Trucks and trailers
• Light commercial vehicles
• Business vehicles

General equipment and tools:

• Forklifts and excavators
• Medical and dental
• IT hardware such as desktop computers, servers and printers

Mining Business related equipment:

• General plant equipment
• Office or shop furniture and fittings
• Air conditioners, display screens, kitchen equipment, signage

The Government increased the threshold on the scheme initially from $20,000 to $25,000, then to $30,000 just last month.

According to Treasurer Josh Frydenberg, the boost opens up the write-off to an additional 220,000 businesses, taking the total number eligible for the deduction up to 3.4 million.

“This scheme is also a really good opportunity to stimulate the economy, with the flow on-effects felt by all businesses,” said Mr Perks.

He said if business owners were interested in taking advantage of the scheme, a finance broker could assist in getting the best deal on a loan to purchase the asset.

“By using this incentive, you could claim depreciation on business as a one-off lump sum instead of claiming smaller tax deductions over a number of years,” said Mr Perks.

“With access to ready funds you can preserve cash flow while the write-off scheme helps you reduce taxable income this financial year,” he said.

“Generally, you can apply in minutes, get approved with 24 hours and funded the next day, providing you meet the minimum qualification criteria.”

“Turning to a finance broker also ensures rates are very competitive. ”

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