The Instant Asset Write-Off Returns for 2024/25: How to Maximise It for Your Business

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Great news for small business owners: the Instant Asset Write-Off scheme is back for another financial year, and it's time to make the most of it!

This tax-saving tool has been a real game-changer since it was first introduced, allowing businesses to claim immediate deductions on eligible assets.

As we head into the 2024/2025 financial year, let’s break down how tradies can leverage this scheme to boost their business.

What Is the Instant Asset Write-Off?

Simply put, the Instant Asset Write-Off allows small businesses to immediately deduct the full cost of eligible assets up to $20,000 in the year they are first used or installed ready for use. This deduction is particularly handy for managing cash flow and encouraging reinvestment in your business.

David Rosenthal from Retinue Accounting highlights its significance: “Since it was first introduced, the Instant Asset Write-Off has become an invaluable deduction for small businesses, and it’s great news that it will be continuing. By allowing businesses to immediately deduct the cost of eligible assets, it offers significant cash flow benefits and encourages people to reinvest in their businesses.”

Eligibility Criteria

To qualify for the Instant Asset Write-Off, your business needs to meet a couple of key criteria:

• Turnover Threshold: Your business must have an aggregated turnover of less than $10 million.
• Asset Cost Limit: The asset must cost less than $20,000 and be first used or installed, ready for use for a taxable purpose between 1 July 2024 and 30 June 2025.

If your business meets these criteria, you're good to go.

Claiming Multiple Assets

Here’s where the Instant Asset Write-Off really shines: the $20,000 threshold applies on a per-asset basis. This means you can claim the deduction multiple times for different assets.

Rosenthal explains, “One of the main benefits of the Instant Asset Write-Off is that it can be claimed multiple times; it doesn’t need to be limited to one asset. For example, if you’re setting up a commercial kitchen, you could purchase several high-value items separately and claim the Instant Asset Write-Off multiple times.”

Eligible Assets

So, what exactly can you claim under the Instant Asset Write-Off for 2024/2025? Here’s a rundown of some of the eligible assets:

• Vehicles (subject to load and passenger limits)
• Machinery and Equipment
• Computers and Laptops
• Office Furniture and Fittings
• Tools and Machinery
• Technology Hardware (printers, scanners, monitors, etc.)
• Solar Panels / Energy Efficient Equipment
• Kitchen Equipment (restaurants and cafes)
• Agricultural Machinery and Equipment
• Manufacturing Equipment

These assets are essential for keeping your business running smoothly, and with the write-off scheme, you can reinvest in your business without straining your cash flow.

Assets You Can’t Claim

However, not everything is eligible. Here’s what you can’t claim:

• Capital improvements to buildings
• Assets costing $20,000 or more
• Assets not installed ready for use for a taxable purpose before 30 June 2025
• Intangible Assets
• Second-hand assets over $20,000
• Assets not used for taxable purposes

Making the Most of the Write-Off

While the Instant Asset Write-Off is a fantastic tool for reducing your tax liability, it’s important to be strategic about your purchases.

Rosenthal advises against buying assets just to save on tax: “The scheme can be helpful in reducing tax, but in order to buy those eligible assets in the first place, business owners need to have the cash. And so they have to ask themselves: is my main goal to save tax, or do I need to preserve my cash flow?”

He also points out the importance of planning ahead: “Too often, we see business owners who want to buy larger assets like a new car or major appliance for the business and deduct it under the Instant Asset Write-Off. But they forget that the purchase needs to be received, installed, and ready for use before June 30. So you may have to factor in things like financing, waitlisting, and installation timeframes. Plan ahead, and don’t leave your purchases too late.”

Get Professional Guidance

Navigating tax schemes like the Instant Asset Write-Off can be tricky, so if you’re unsure about the best approach for your business, it’s a good idea to get some professional advice.

Cassy Bailey from Retinue Accounting is ready to help—get in touch to book your free initial consultation and make sure you're maximising your tax benefits for 2024/2025.

In summary, the Instant Asset Write-Off for 2024/2025 is a valuable opportunity for small businesses to invest in their growth while managing their tax liabilities.

By understanding the eligibility criteria, strategically planning your purchases, and seeking professional advice when needed, you can make the most of this scheme and keep your business on the path to success.

About the Guest Author 

Leigh Johnston​​​​ is the Senior Marketing and Communications Manager of Retinue Accounting, a team of accountants ready to help small businesses succeed.