Instant Asset Write-off extended
The good news is Treasurer Josh Frydenberg announced last week that the Government will extend the $150,000 instant asset write-off (IAWO) by six months until 31 December 2020. Under the measure, the asset must be both acquired and installed ready for use by 31 December 2020, instead of 30 June 2020. The extension will give Self Storage businesses additional time to acquire and install assets.
The instant asset write-off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided each asset costs less than $150,000. Assets can be new or second hand and could include for example a vehicle for customer move-ins
The IAWO may also apply to internal fit out at your facility but will exclude capital improvements.
General Tax Planning Strategies
With the end of the financial year fast approaching now is a perfect time to review your year to date financial results and consider any tax planning strategies which may be applicable to your self-storage business.
Some common strategies to take before 30 June 2020 to reduce your businesses taxable income may include:
- Prepaying up to 12 months expenses including insurance, rent, subscriptions or interest)
- Ensuring your superannuation payments are made by 30 June for yourself and staff members
- Topping up your voluntary superannuation contributions
- Reviewing your debtors listing and writing off any old unrecoverable debts
You may also improve your cashflow by considering the following:
- Ensuring you have received your entitlements under the Federal and state Governments COVID-19 economic stimulus payments
- Accessing tax lodgment deferrals
- Paying GST on a cash basis rather than an accrual basis
Should any of the above be applicable to your business and you would like further information please contact our supporting accounting firm Bishop Collins https://www.bishopcollins.com.au/