With the EOFY fast approaching, now is the perfect time to implement your long-considered security upgrades and use them as an instant asset tax write-off opportunity. Better still, with the Australian government recently announcing plans to extend the instant asset tax write-off program, there’s never been a better time to further invest in your business’ security measures.
In this post, we explain why businesses must upgrade their security measures and how they can benefit from instant tax write-offs for EOFY Security Upgrades.
EOFY Security Upgrades: Understanding Instant Asset Tax Write-Offs
Explanation Of Instant Asset Tax Write-Offs
An instant asset tax write-off allows eligible businesses to claim an immediate deduction for the cost of an asset, such as security equipment, in the year it was initially installed or used. This helps reduce the financial burden of large capital purchases, boosting cash flow and enabling further investment in other areas like recruitment.
Eligibility Criteria For Businesses
- Annual Turnover: Less than $10 million.
- Threshold Per Asset: $20,000 (businesses can write off multiple assets).
Additionally, the Australian Government recently announced plans to extend the initiative, covering eligible assets purchased from 1st July 2023 to 30th June 2024 (Australian Taxation Office) (OnDeck Australia).
Thresholds And Limits
Eligibility varies based on asset purchase date and turnover:
| Turnover | Date Range for Asset Use | Threshold |
|---|---|---|
| < $10m | 12th Mar 2020 to 30th Jun 2021 (asset purchased between 12th May 2015 and 31st Dec 2020) | $150,000 |
| < $10m | 2nd Apr 2019 to 11th Mar 2020 | $30,000 |
| < $10m | 29th Jan 2019 to 2nd Apr 2019 | $25,000 |
| < $10m | 1st Jul 2016 to 28th Jan 2019 | $20,000 |
| < $2m | 12th May 2015 to 30th June 2016 | $20,000 |
| < $2m | 1st Jan 2014 to 12th May 2015 | $1,000 |
| < $2m | 1st July 2012 to 31st Dec 2013 | $6,500 |
| < $2m | 1st July 2011 to 30th June 2012 | $1,000 |
| < $500m | 12th Mar 2020 to 30th Jun 2021 (asset purchased between 12th May 2015 and 31st Dec 2020) | $150,000 |
| < $50m | 2nd Apr 2019 to 11th Mar 2020 | $30,000 |
Ineligible Assets
- Capital works (buildings and structural improvements)
- Leased assets (leased out for more than 50% of the time)
- Certain horticultural plants (e.g., grapevines)
- Some types of software
- Assets used in R&D activities (CommBank) (Lumi Australia – Small business loans).
Benefits of Investing in EOFY Security Upgrades
Deterrent To Crime: Security measures like cameras and alarms can prevent crime by simply being visible.
Enhanced Employee Safety: Security measures like access control make your workforce feel safer, improving productivity.
Protecting Your Assets: Upgrades protect against theft and vandalism, ensuring business continuity and maintaining your reputation.
Reduction Of Internal Fraud: Cameras and access control help prevent and detect internal theft.
Lower Insurance Premiums: Security upgrades can lead to discounts on business insurance premiums.
Security Measures to Consider
- Security Camera Systems: Deter and record potential incidents. Consider active deterrent cameras, ANPR cameras, and thermal imaging cameras.
- Alarm Systems: Choose between self-monitored and professionally monitored systems.
- Access Control Systems: Increase security by controlling who can enter your premises.
- Security Lighting: Reduce opportunities for criminals with motion-activated lighting.
- Perimeter Fences and Security Screens: Strengthen your site’s boundaries and increase deterrence.
Claiming Instant Asset Tax Write-Offs for Security Upgrades
How to Claim: Use simplified deduction rules and claim the write-off in your tax return for the year the asset was purchased and installed or used. Ensure to keep all receipts and invoices (Lumi Australia – Small business loans).
Consult Your Accountant: Consult your accountant to ensure you claim the maximum tax deductions and understand the specific eligibility criteria for your assets.
Summary
- Instant Asset Tax Write-Off: Immediate deduction for eligible security assets.
- Eligibility: Less than $10 million turnover, $20,000 per asset threshold.
- Ineligible Assets: Includes capital works, leased assets, certain plants, some software, and R&D assets.
- Benefits: Crime deterrence, employee safety, asset protection, fraud reduction, and lower insurance premiums.
- Security Upgrades: Cameras, alarms, access control, lighting, fences, and screens.
For a free, no-hassle chat on the best EOFY security upgrades for your business, give us a call or drop us a line, and we’ll be thrilled to help out however we can.
Disclaimer: Advice given in this article is general advice. Consult your accountant before making a purchase for the purpose of instant asset tax write-off.
