Two Birds with One Stone: Take advantage of the IAWO: Reduce your taxable income and upgrade your UPS with APC!
The instant asset write-off scheme allows you to claim a full tax deduction on multiple pieces of equipment purchased by your business, for your business, worth up to $30,000 each. With the introduction of an increased threshold following the 2019 Budget and a looming EOFY, now is the perfect time to pick up a top-of-the-line Uninterruptable Power Supply (UPS) courtesy of APC.
What is the instant asset write-off (IAWO)?
Introduced in 2015, the instant asset write-off was designed to allow Small Businesses with aggregate turnover of less than $10 million to immediately deduct the full cost of the business portion of an asset up to the value of $20,000 or $25,000, depending on when the asset was first used, or installed and ready for use.
What’s Changed in 2019?
The threshold has been increased to $30,000 for assets (new and used) purchased and ready for use after 7:30pm on 2nd April 2019, and the time frame extended to 30 June 2020.
Keep in mind that from 1 July 2020, the threshold will revert to just $1000, as it was prior to 2015.
What about assets over the $30,000 threshold?
Assets that exceed the $30,000 threshold can not be instantly deducted, even if the portion used for the purposes of running the business is less than the $30,000 threshold. These assets can be deducted over time using either a small business pool or general depreciation rules.
How is it different from previous Asset Depreciation Rules?
Prior to 2015, the purchase of any asset used for business purposes over the value of $1,000 was subject to the relevant depreciation rate for that class of asset, meaning the cost of the Asset could be deducted in portions over several years. The IAWO however allows you to claim the full cost of the Asset (provided it is less than the threshold) in the financial year that it is installed and ready for use.
What are the GST implications?
If your business is registered for GST purposes, you exclude the GST amount paid on the asset when calculating how much you can deduct, as you will claim the GST paid as a credit in your BAS statement.
If you aren’t registered for GST, you include the GST amount you paid on the asset in calculating your total deductible amount.
Why should you invest in a UPS?
The convergence of Businesses and Computing Systems is now a well-founded reality for many organisations in the 21st century. Increasingly, companies are becoming more and more reliant on their operating systems to ensure day-to-day viability. Think POS, Network Servers, Computer Hardware, EFTPOS, Security Systems, Refrigeration – the list continues to grow every year. If any one of these systems fails unexpectedly due to a blackout, surge or spike, the consequences can be dire.
Lost revenue, lost data, lost goods, loss of customers, loss of unsaved work – the list does not make for pretty reading. Fortunately, there is one critical piece of hardware that can safeguard your business against any and all of these potential pitfalls. A UPS.
A UPS provides backup power in the event of a blackout by way of a battery. Oftentimes, models are equipped with battery packs to ensure you can replace the battery to keep systems running in the event of an hours-long power issue. Furthermore, not only does it provide immediate power backup, it protects your equipment from the more frequent surges and spikes coming from the grid, ensuring constant, reliable, clean power for your business.
In this sense, it acts as the ultimate insurance policy for your business-critical hardware.
Act now before the window closes!
Whether you’re after a simple back-up system for your desktop computer or a state-of-the-art solution capable of powering a data-centre, APC has the right product for your business application.
Not only are you ensuring uptime, continuity and protection for your business, by taking advantage of the Instant Asset Write Off and acquiring a UPS, you are effectively reducing your own tax bill. Purchase before June 30 this year to claim the full deduction in the 2018/19 Financial year!
For Further information, talk to your accountant or visit the ATO website to learn more.