Instant asset write-off extended: $150,000 claims to last until December 31.

Businesses will be able to claim accelerated depreciation on new assets for the remainder of the year under the latest extension to the $150,000 instant asset write-off program unveiled by Treasurer Josh Frydenberg on Tuesday.

After expanding the program from assets worth $30,000 to $150,000 in response to the COVID-19 pandemic in March, the federal government has now extended the deadline for making claims from July 1 to December 31 2020.

Until this week, the $150,000 write-off was due to expire at the end of this month.

The adjustment falls short of calls from advocates, including small business ombudsman Kate Carnell, for the scheme to be made permanent, but it will nevertheless provide firms earning up to $500 million a year with an extra six months to process their asset claims.

Frydenberg said the extension is expected to cost taxpayers $300 million over the next four years. However, uptake of the scheme is uncertain because it is demand-driven and requires firms to first buy assets out of their own pockets.

“We’ve seen strong take-up of this program in the past,” Frydenberg told Sunrise on Tuesday.

“We know that when the restrictions are eased and people are back at work that our cafes and restaurants will be busy, our hotels will start having occupants again and our businesses will be able to import and export.”

The instant asset write-off scheme enables businesses to immediately deduct the value of an asset in the year of purchase, instead of claiming deductions over several years. Businesses can claim multiple assets.

The Treasurer provided no further figures about usage of the write-off since the coronavirus extension was put in place in March, although this data is likely to come through with tax returns due to be filed over the coming months.

For further information or queries visit the ATO here, or contact your local Highview Accountant.

Source: MyBusiness.com.au