COVID-19 National: Business – Increasing the Instant Asset Write-Off

This program aims to assist Australian businesses by providing a higher instant asset write-off (IAWO) threshold, as part of the Government's response to the COVID-19 pandemic.

Eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use.

For assets first used or installed ready for use between 12 March 2020 until 30 June 2021, and purchased by 31 December 2020, the instant asset write-off:
- Threshold amount for each asset is $150,000 (up from $30,000).
- Eligibility extends to businesses with an aggregated turnover of less than $500 million (up from $50 million).

From 1 January 2021, the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be $1,000.

From 7:30pm AEDT on 6 October 2020 until 30 June 2022, temporary full expensing allows a deduction for:
- The business portion of the cost of new eligible depreciating assets for businesses with an aggregated turnover under $5 billion or for corporate tax entities that satisfy the alternative test.
- The business portion of the cost of eligible second-hand assets for businesses with an aggregated turnover under $50 million.
- The balance of a small business pool at the end of each income year in this period for businesses with an aggregated turnover under $10 million.

Please refer to the website for more information.

Eligibility to use instant asset write-off depends on:
- The business aggregated turnover (the total ordinary income of the business and that of any associated businesses).
- The date the business purchased the asset.
- When it was first used or installed ready for use.
- The cost of each asset being less than the threshold.

The criteria have changed over time so make sure to check whether the business is eligible.

Businesses are not eligible to use instant asset write-off on an asset if the aggregated turnover is $500 million or more.

If temporary full expensing applies to the asset, businesses do not apply instant asset write-off.

Instant asset write-off can be used for:
- Multiple assets, if the cost of each individual asset is less than the relevant threshold.
- New and second-hand assets.