The End of the $20,000 Instant Asset Write-Off
The $20,000 Instant Asset Write-Off, a vital tax break for Australian small to medium businesses, is set to end on 30 June 2025.
The latest Federal Budget sadly came with an unfortunate reality for businesses. From 1 July 2025, the threshold will drop to just $1,000, significantly reducing the immediate tax relief available for business asset purchases.
This critical change will change the strategies for many small to medium businesses, demanding smarter financial planning and purchasing decisions.
But what exactly does this mean for your business?
How can a business maximise the benefits before the deadline?
And more importantly, how can Adept IT Solutions assist you throughout this process? Let’s find out!
What is the $20,000 Instant Asset Write-Off?
The Instant Asset Write-Off allows Australian small businesses with a turnover of less than $10 million to claim an immediate deduction for the business portion of an asset’s cost under $20,000. This deduction applies on a per-asset basis, meaning businesses can purchase and claim multiple assets, as long as each one individually costs less than the $20,000 limit.
This scheme covers a wide range of business assets, including:
- IT equipment such as laptops, desktops, and servers
- Vehicles like utes, vans, and delivery trucks
- Office furniture and fittings
- Machinery and tools essential for operations
To qualify, assets must be:
- Purchased and installed ready for use between 1 July 2023 and 30 June 2025
- Less than $20,000 each (excluding GST for GST-registered businesses)
- Used primarily for business purposes
For more information, to ensure that you are correctly implementing the scheme, be sure to check the ATO Instant Asset Write-Off Guide.
This upfront tax deduction has been a game-changer for small and medium businesses, enabling immediate savings that can be reinvested into growth and expansion.
Looking to take advantage of the $20,000 instant asset write-off? Adept IT Solutions has thousands of eligible tech products in our online store, ready to ship fast and help power up your business operations.
As a trusted IT support partner across Newcastle, the Hunter, Central Coast, and Sydney, we bring expert advice and premium solutions tailored to your business needs.
Don’t miss out on this limited-time opportunity to invest in your IT while claiming tax benefits.
Email us today at sales@adept-it.com.au to find out how we can help you make the most of it!
What’s Changing After 30 June 2025?
When the current asset write-off scheme ends, the threshold will revert to a mere $1,000.
This dramatic reduction means that any business-related asset costing over $1,000 will no longer qualify for an instant deduction. Instead, these purchases will need to be depreciated over several years.
For example:
- A $5,000 IT server will only be claimable at a fraction of its cost each year, instead of being deducted upfront.
- A $15,000 company vehicle that could once be written off in a single financial year will now need to be depreciated across eight years.
This shift will likely mean that businesses will be more hesitant investing in critical equipment, as the immediate cash flow benefits will disappear.
How the Changes to the $20,000 Asset Write-Off can Impact your Business
The removal of the $20,000 Instant Asset Write-Off will affect businesses in three key areas:
- Reduced Cash Flow Flexibility:
The upfront tax deduction allowed businesses to reclaim costs immediately, boosting liquidity. With the threshold reduced to $1,000, many essential assets will require standard depreciation, tying up capital for longer periods. - Strained Budgeting for Equipment Upgrades:
Investments in hardware, IT infrastructure, and business-critical tools will become harder to justify without instant tax relief. Smaller cash flow savings may push business owners to delay or forgo necessary upgrades. - More Complex Tax Planning:
Claiming deductions over several years adds layers of complexity to tax planning and asset management. Businesses will need to track depreciation schedules for every major purchase, increasing administrative workload.
For many, the end of this scheme represents a call to action: Invest now, or you may face longer-term financial strain.
3 Ways your Business can Take Advantage of the $20,000 Instant Asset Write-Off Before It’s Gone
If your business relies on regular asset purchases, or even just have hardware that is due for an upgrade, there’s still time to maximise the benefits of the $20,000 instant asset write-off before it ends. Here’s 3 ways how you can do so:
1. Review Your Asset Needs Now
Take a close look at your equipment and technology. Are your servers running slow? Is your PC not keeping up with what you need? Are your laptops, printers or similar IT hardware nearing its end of life?
Identifying these potential issues now, before the 30th June deadline, is crucial to ensure that you maximise your hardware’s performance using the $20,000 instant asset write-off.
2. Purchase Before 30 June 2025
To qualify, assets must be installed and ready for use by 30 June 2025. Simply ordering equipment isn’t enough, it has to be operational. Consider this when planning larger purchases that may have longer delivery times.
3. Prioritise High-Value Investments
Focus on purchases that have a direct impact on business efficiency and revenue. For businesses that rely heavily on IT hardware, this might mean upgrading networks, replacing outdated servers, or investing in high-performance computers and laptops for staff.
How Adept IT Solutions can Help your Business Prepare for the End of the $20,000 Instant Asset Write-Off
Not too sure how best to invest in your business with the aid of the $20,000 instant asset write-off? The team here at Adept IT Solutions are more than willing to assist your company today!
With our online shop hosting the latest and greatest in technology and IT hardware, you can trust our products to take your business to the next level. Be sure to request access to our IT shop by sending through an email to info@adept-it.com.au.
Our expert team has provided expert levels of IT support and services to the local Newcastle region and beyond for over 20 years now, and is ready to help wherever your business requires.
Contact us today, via phone at 1300 423 378 or simply email us at info@adept-it.com.au to chat further. We look forward to hearing from you, and equipping your business with the latest and greatest in IT hardware!
