What Is the Instant Asset Write-Off?
If you are a small business owner, the instant asset write-off is an important tax incentive to reduce your taxable income before the end of the 2024–25 financial year.
Key Dates and Eligibility Criteria
The Australian Taxation Office (ATO) allows eligible small businesses to immediately deduct the business portion of assets costing less than $20,000. To qualify, these assets must be first used or installed ready for use between 1 July 2024 and 30 June 2025.
How Does It Work?
The instant asset write-off allows eligible businesses to deduct the full cost of:
- Assets under $20,000 each
- New or second-hand items
- Assets first used or installed for business use between 1 July 2024 and 30 June 2025
- Items used primarily for business
The deduction applies per asset, so multiple eligible purchases under $20,000 each can be written off.
Who Is Eligible?
Your business must:
- Have an aggregated turnover of less than $10 million
- Apply the simplified depreciation rules
For full eligibility criteria, visit the ATO website:
What Can Be Claimed?
Eligible assets include:
- Work vehicles such as vans, utes, and trailers
- Office furniture like desks and chairs
- Tools and machinery
- Computers, laptops, and printers
- Point-of-sale systems and other business-related technology
For example, a café owner could instantly write off a new coffee machine purchased in October 2024, as long as it meets the eligibility criteria.
Why Should You Act Now?
The current $20,000 instant asset write-off is a temporary measure. After 30 June 2025, unless extended by the government, the threshold may revert to a lower limit. This means businesses may have to depreciate asset costs over several years. Planning purchases now ensures you make the most of the available deduction.
Mistakes to Avoid
To ensure your claim is valid, avoid these common errors:
- Buying assets that are delivered or installed after 30 June 2025
- Purchasing items over the $20,000 threshold
- Claiming the full amount on assets used partly for private purposes
- Not using the simplified depreciation method
- Failing to maintain proper records such as receipts and usage documentation
Finance Options Available
If funding is an obstacle, we offer flexible solutions to support your investment and manage cash flow, including:
- Asset finance
- Short-term business loans
Learn More
For more insights and strategies on business finance and tax, visit our blog homepage:
Frequently Asked Questions
What is the instant asset write-off limit for the 2024–25 financial year?
The limit is $20,000 per asset, excluding GST. You can write off multiple assets under this threshold.
Do second-hand items qualify?
Yes, both new and used assets qualify if they meet all other conditions.
Can I claim the full cost of a business vehicle?
Yes, if the vehicle costs less than $20,000 and is used for business purposes. If there is mixed use, only the business portion can be claimed.
What if the asset is delivered after 30 June 2025?
You will not be able to claim the instant asset write-off. The asset must be installed and ready for business use before this date.
Do I need to pay for the asset in full to claim it?
No, the asset can be financed. As long as it is installed and ready for use, and all other criteria are met, you can claim the deduction.
