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Frequently Asked Questions
As a small business owner, what types of assets should I consider purchasing?

Generally, assets employed in the earning of assessable income can be considered, with a few exceptions. We strongly recommend you speak to your accountant or tax professional to see how any large purchases might impact your cash flow. This obviously needs to be weighed up against the benefits that the asset would bring to your business.

What can be classified as a car?

For this initiative a car is defined as a vehicle “designed to carry a load of less than one tonne and fewer than nine passengers”

How does the $150,000 immediate write-off work?

The instant asset write-off allows businesses (with an annual turnover under $500 million a year) to claim immediate deductions for new or second-hand assets (such as plant, vehicles, tools and other equipment). The assets must be used, or installed ready for use, in the financial year you’re claiming for. The current initiative is set to close at June 30th 2020 and from 1 July 2020 the instant asset write-off will only be available for small business with a turn-over of less than $1,000,000 and the threshold will be $1,000.

When it comes to completing your tax return for this financial year, you can claim the business portion of the eligible asset’s cost.

Can multiple assets be purchased? Does the total amount claimed need to be under $150k?

Yes, multiple assets can be purchased – even if they are identical the $150k threshold is applied on an asset-by-asset basis. So long as the cost of each eligible asset is under $150k the write-off can be made.

Are second hand assets eligible?

Yes. Some exclusions and limits apply such as horticultural plants and software allocated to a software development pool. See the ato website for more info.

What if I am trading in a vehicle to buy a new one?

A trade in has no impact on the cost of an asset. The trade-in just reduces the net amount paid for the asset, not the cost of the asset. The full cost can still be written off.

What businesses are eligible for the immediate write off?

Businesses with an annual turnover under $500 million per year.

What if the asset is not wholly used for business purposes?

E.g. Bob purchases a ute for his lawn mowing business. He pays $30,000 for the ute and it is used for business 60% of the time. Bob can write off $18,000 (60% of the cost) as the price he paid for the ute is under the $150,000 cap.

What type of financing is allowed? Are there any exceptions?

Commercial loans, chattel mortgages and hire purchases all qualify. Leased assets do not qualify as the business itself does not take ownership of the asset.

How long does it take to get a business loan approved?

Each business is unique and the approval time can therefore differ. Generally speaking, loans can be approved for eligible applicants within days as opposed to weeks.  Speak to a Yes Loans broker for more information on how we can assist you and advise on our lenders approval criteria.

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