With 30 June fast approaching, your action plan to reduce your business’ tax liability for the 2021 year should already be in the works. The big ticket item for this financial year is the immediate asset write off. Each year the cost limit for these assets has been increasing and from 6 October 2020 most business will be able to write off in full any assets purchased and installed/ready to use after this date.
So this is the last opportunity to purchase tools, equipment, computers and other assets to immediately reduce the profit of your business. The key is only the business use can be deducted and the asset has to be ready to use (so purchasing an item but waiting for it to be supplied will not assist the current financial year).
The big ticket item most clients think of is motor vehicles and these are certainly eligible for the immediate asset write off. However it is only the business use percentage that is deductible and only up to the car depreciation limit of $59,136.
The other item excluded is building works. Interestingly, solar panels installed on business premises are viewed as an eligible asset so these can be immediately deducted.
If you would like further information or need assistance with your annual tax planning, please do not hesitate to contact us.