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Yesterday’s news of an immediate writeoff provision for equipment purchased for less than $20,000 has galvanized small business across Australia. Now the provisions appear to make it even better for firms buying sound, lighting and vision equipment.
Although not yet clarified, the provision allows an immediate writeoff on every item purchased for less than 20 grand. Previous, these would be depreciated over three or four years. Like the earlier scheme, abandoned in 2014, where items under $6,000 were written off, the new provision appears to also include current inventory.
Sydney accountant Kieran Martin of Watkins Coffey Martin told CX that equipment currently partially depreciated may also be written off “subject to the provision getting legislated”.
CX also understands, from other specialists we contacted, that equipment financed under a chattel mortgage, where the equipment is ‘on the books’ would also attract the writeoff.
A chattel mortgage also can result in an immediate GST refund, producing the tantalizing possibly of a 100% writedown on the equipment, and a further 10% refund of the GST component – all within this financial year. The outlay would be the first payment on the finance deal, which itself would be considerably less than the GST refund.
The only fly in that ointment is the difficulty obtaining finance for sound, light and vision equipment. It remains to be seen how ‘creative’ some suppliers will become in the days ahead.
(Image: Rode BMFL or practically ANY large moving light can be written off under this new provision, along with almost every line array element and a whole lot more!)
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