Axe the Tax
Instant asset write-off scheme up to $20,000 per item
Making the most out of the extended asset write-off scheme
Although it’s not yet a permanent feature, the $20,000 instant asset write-off scheme has been given an extra year’s grace. This scheme is aimed at smaller businesses and startups that need to purchase equipment in order to continue making a profit or to expand. Naturally, fitness equipment is covered by this scheme which allows you to claim accelerated depreciation on equipment worth up to $20,000 per item.
The instant asset write-off scheme encourages smaller businesses and startups to increase their investments. And it is working. Claims have more than doubled in the past year, many of the claimants representing educational institutions, corporate offices and gyms.
So what should gym owners and managers know about this scheme?
- You need to bemaking a profit: this scheme gives you the opportunity to apply for a tax break – if you are making a loss, you’re not paying tax and so there’s nothing to write off;
- A write-off can be applied foras many times as you need– so if you purchase ten machines (new or second-hand) for $19,999 a piece, you can claim on all ten of them separately;
- Your company must not show an annual turnover of more than $10 million;
- Your purchase must be relevantto your business: you won’t be able to claim for an industrial candy-floss machine if your business is health-related;
- For a gym, you can claim back on new or second-hand computers, fitness machines, vending machines, monitors and TV screens – anything you like – as long as it’s a piece of equipmentand it’s related to your business;
- Be careful of phones– if you use the $900 smartphone for personal calls, you will have to separate the purchase into personal and business use and won’t be able to claim its full worth;
- Don’t buy job lotsif the total price exceeds that $20,000 platform – buy separately if they do;
- You can’t claim for stored, ‘spare’ equipment – use it, or lose it(the tax deduction, not the equipment)