The Instant Asset Write Off presents business with the opportunity to significantly upgrade their IT setup and boost productivity in the workplace. But what services can business owners upgrade? And how much longer do you have to claim these deductions?
Understanding the answer to these questions could be key to enhancing efficiency in your workplace, both for your bottom line and your daily operations. While many businesses struggle along with outdated technology, using the Instant Asset Write Off to upgrade your IT could be a great way to future proof your business, make life easier for your staff and, of course, save on tax.
In this guide, we take a look at the rules and history of this federal government initiative, when these deductions are set to change and what parts of your IT hardware you can claim this financial year to best enhance your tech setup.
What Is The Instant Asset Write Off?
First introduced in 2011, the Instant Asset Write-Off allows you to fully deduct the entire amount spent on a business asset in the same financial year of its purchase. This grants you an immediate tax deduction for the complete cost of the asset . This program has helped many Australian business save thousands of dollars, enabling them to claim multiple assets so long as the cost of each individual asset is less than the threshold at the time.
Previously, under the depreciation rules determined by the ATO, you would have to spread the cost of the asset over several years, typically four years for many assets. For example, if you bought an asset for $50,000, you could only claim $12,500 per year for four years.
When this initiative started the instant asset write-off had a limitation of $1,000 per asset, meaning you could only deduct the first $1,000 of any business asset purchase. However, since October 2020, the threshold sits at $150,000 per asset. This program was extended through to the end of the 2022-23 financial year, giving business owners another chance to reduce their overall taxable income with purchase of a new business asset.
But you’ll need to be quick! Under the new federal government budget, the Instant Asset Write Off is set to be reduced from $150,000 to $20,000 next financial year. Business owners who want to utilise these deductions should start the process today to take full advantage of the program and maximise their claim.
If your company’s IT setup is struggling to cope with your business needs, it may be worth utilising this Instant Asset Write Off to upgrade your IT hardware, allowing your business to stay technologically competitive while balancing your bottom line.
What IT Hardware Can I Upgrade With The Instant Asset Write Off?
The Instant Asset Write Off can be applied to a range of business assets, but for businesses who need to optimise their IT setup, this is a terrific chance to fully modernise their technology. Nothing is more frustrating for business owners and staff than a slow computer or a spotty wi-fi connection, and this program gives businesses the chance to upgrade their systems and future-proof their company in the long-term.
But what parts of your IT solution need upgrading? There are many components to a great IT system, and integrating them together will help build synergy in the workplace. From phone systems to computer workstations, you can utilise the Instant Asset Write Off to upgrade a variety of IT hardware solutions, including:
Business Computers And Laptops
Upgrading your business computers, laptops and workstations is a great first step to improve your IT setup. Modern PCs and laptops can be easily tailored to your specific needs, boosting your computer’s processing power and storage with the connection points that your business requires. You’ll also enhance workplace efficiency for your staff, saving them from using slower technology that doesn’t meet the modern requirements of business today.
Wireless Network Upgrades
Still using wired connections? There are many cost-efficient business Wi-Fi routers available on the market today that can easily replace the physical servers and ports that require ongoing management. You can also extend that coverage with a range of devices, ensuring that your business is covered by a strong and reliable network.
We’ve all been there: fiddling with a paper jam or waiting around an outdated printer waiting for it to scan and send a document. Upgrading to a commercial-grade printer will both save you time and money, with modern printers offering a range of integration features that are designed to make these processes so much easier. You’ll be able to tailor your solution to the unique volume, speed, colour and budgetary requirements of your business, without the headaches that come from clunkier, consumer-level solutions.
VOIP Phone Systems
Save on your phone bills by setting up VOIP technology, allowing you to make voice and video calls easily. VOIP systems can be integrating into your existing phone setup and can even be connected to your own personal devices. Also, this technology can be connected to a Microsoft Teams account, allowing for video calls with clients and customers from anywhere in the world.
Upgrading your tech to suit your growing business needs is a great decision and the Instant Asset Write Off program is a strong incentive to get this started. But you’ll need to get in quick, the maximised reduction is set to expire on 30 June 2023!
Assessing exactly what your business needs can be a tricky process for many business owners, lacking the expertise in both finding the right solution and setting it up. But that’s where a professional IT company like Concord IT can help. Our team can provide a free IT hardware audit of your business and provide guidance on what you need to modernise within your system. This process will not only help improve your IT setup but, when combined with the Instant Tax Write Off, will save your business time and money in the long run.
Please note that this article should not be considered taxation or financial advice, and that prior to the purchase of any deduction-eligible asset business owners should consult with accredited taxation and financial advisors.