Refrigeration and Air Conditioning (RAC) contractors have welcomed the Australian Government’s decision to extend the instant asset write-off scheme to December 31, 2020.
It means an additional six months for businesses to claim on purchases up $150,000.
Australian Refrigeration Council CEO, Glenn Evans, said the scheme will now cover both new and second-hand assets, like vans and equipment.
“The instant asset write-off scheme enables small and medium-sized businesses to deduct the value of an asset in the year of purchase, freeing up cash now, instead of having to claim deductions over several years,” Evans said.
“This extension will help to increase investment and keep businesses moving, in light of the uncertainty created by the COVID-19 pandemic.
Federal treasurer Josh Frydenberg said the write-off measures will support over 3.5 million businesses.
He said they are designed to support business sticking with investment they had planned, and to encourage them to bring investment forward to support economic growth over the near term.
“The instant asset write-off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure,” Frydenberg said.
“The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided each costs less than $150,000. It will also give businesses additional time to acquire and install assets, as they will now have until the end of the year.
“Assets can be new or second hand and could include for example a truck for a delivery business or a tractor for a farming business.”