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 in the process.

Understanding Instant Asset Tax Write-Offs

Explanation Of Instant Asset Tax Write-Offs

An instant asset tax write-off is a type of tax break that 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. Instant asset tax write-offs help companies reduce the financial burden of certain large capital purchases.

The reduced tax burden helps boost the company’s cash flow, allowing it to increase spending in other areas, such as recruitment. Instant asset tax write-offs are designed to help companies prosper in the current economic slowdown and, ultimately, help boost the Australian economy as a whole.

Eligibility Criteria For Businesses

Put most simply, for a company to claim an instant asset tax write-off, it must have an annual turnover of less than $10 million. Each instant asset tax write-off has a threshold of $20,000, but as the threshold is applied on a per-asset basis, businesses can write off multiple assets.

Additionally, the Australian Government recently announced plans to extend the instant asset tax write-off initiative, covering eligible assets purchased from 1st July 2023 to 30th June 2024.

Thresholds And Limits

Although the $20,000 asset threshold for businesses with an annual turnover of less than $10m is the main eligibility criteria going forward, other thresholds apply to assets purchased at other times. Similarly, there are circumstances in which the instant asset tax write-off applies to companies with higher turnovers – or, conversely, to companies with lower turnovers. Here’s a quick overview of those circumstances.

Eligibility	Date range for when the asset was first installed or used	Threshold
Turnover of less than $10m	12th Mar 2020 to 30th Jun 2021 – if the asset was purchased between 12th May 2015 and 31st Dec 2020	$150,000
Turnover of less than $10m	2nd Apr 2019 to 11th Mar 2020	$30,000
Turnover of less than $10m	29th Jan 2019 to 2nd Apr 2019	$25,000
Turnover of less than $10m	1st Jul 2016 to 28th Jan 2019	$20,000
Turnover of less than $2m	12th May 2015 to 30th June 2016	$20,000
Turnover of less than $2m	1st Jan 2014 to 12th May 2015	$1000
Turnover of less than $2m	1st July 2012 to 31st Dec 2013	$6,500
Turnover of less than $2m	1st July 2011 to 30th June 2012	$1,000

 

Eligibility	Date range for when asset was first installed or used	Threshold
Turnover of less than $500m	12th Mar 2020 to 30th Jun 2021 – if the asset was purchased between 12th May 2015 and 31st Dec 2020	$150,000
Turnover of less than $50m	2nd Apr 2019 to 11th Mar 2020	$30,000

 

Conversely, on the subject of limits, there are certain assets which aren’t eligible for an instant asset tax write-off, which includes:

• Capital works, including buildings and structural improvements.
• Assets that are leased out, or expected to be leased out, for more than 50% of the time on a depreciating asset lease
• Certain types of plants, such as grapevines
• Some types of software
• Assets used in research and development (R&D) activities

Benefits of Investing in Security Upgrades

Deterrent To Crime

One of the best things about security measures like cameras and alarm systems is they can prevent crime by simply being there. Many would-be burglars sizing up your property for a break-in will spot the security guards and alarms around your premises and surmise you’re too risky a target.

Enhanced Employee Safety

Your staff are your most important asset, so increased employee safety is a significant benefit of EOFY security upgrades. People need to feel safe within their working environment to perform at their best, and installing security measures like access control will immediately make your workforce feel more secure and aid their productivity.

Protecting Your Assets

Investing in business security upgrades also helps to protect your assets from criminal activity. This most commonly refers to the theft of inventory and company equipment, but it also includes acts of vandalism that can damage capital assets like machinery and vehicles. Making use of tax benefits to finance essential security upgrades helps ensure business continuity and maintain your reputation within your industry.

Reduction Of Internal Fraud

As well as reducing the chance of a break-in, security upgrades will also help prevent internal fraud, i.e., instances of theft from employees. For a start, the presence of cameras will be enough to deter employees from attempting to steal something. Furthermore, if there is a security incident, advanced CCTV solutions can track employee movements around the site, which can help to narrow down potential perpetrators.

Additionally, improving access control mechanisms can ensure that some areas, such as those containing expensive items or a safe room, can only be accessed by particular individuals and, if need be, only at certain times.

Lower Insurance Premiums

Insurance brokers look favourably upon companies with security alarm systems and CCTV cameras. This is because they’re unlikely to suffer a break-in and warrant a security payout. As a result, some brokers offer discounts on business insurance to companies with robust security measures. Put another way, utilising your EOFY asset tax breaks to implement security upgrades can help you further lower costs.

Security Measures to Consider

Security Camera Systems

Security cameras are an essential part of any business, as they both deter potential wrongdoing and can record footage of an incident should one occur.

Additionally, CCTV camera technology has come a long way, offering features and functionality that make it easier for companies to secure their business. Active deterrent cameras are an increasingly popular security upgrade, because they can detect nearby motion and will trigger an alarm and flashing lights if one of its sensors is triggered. This has the duel effect of letting the person close to the camera they’re being surveiled, while also drawing attention to a possible break-in.

Some companies, namely those with vehicles coming in and out of their site all day, could benefit from installing ANPR (Automatic Number Plate Recognition) cameras. ANPR cameras can classify vehicles as potentially suspicious and alert you if they return to your property. ANPR can also be instrumental in access control, as they can be connected to a gate and configured to open automatically for recognised vehicles.

Thermal imaging cameras, meanwhile, are an effective security measure for businesses with large outdoor areas, such as scrap yards, compounds, and even large car parks. Thermal imaging cameras detect heat and movement, so you can quickly discover someone attempting to break into your property.

Alarm Systems

An alarm system should be another fundamental part of any company’s security strategy, as it provides a lot of functionality that helps protect its employees and assets. An alarm system comprises a central control unit connected to a series of motion sensors positioned around your site.

If there is an intruder, their unauthorised entry will trip one of the sensors, triggering an alarm that will both startle the intruder with a piercing sound and/or recorded message, which serves to disrupt their thoughts and actions. Just as importantly, the siren will alert anyone close by, drawing attention to the perpetrator and their location on the premises.

Now, when it comes down to choosing the right alarm system for your business, the most important factor is whether you want a self-monitored system or a professionally monitored alarm system. With a self-monitored system, you’re responsible for responding to the security alerts generated by the alarms being triggered. This will require determining who will receive the alerts and programming the alarm system to contact those people if an alarm is triggered.

In contrast, with professional, or back-to-base monitoring, a security company will watch over your business site for you – 24/7. Consequently, this also means that the security company will immediately respond to any security incidents, by sending a security patrol or alerting the authorities.

Access Control Systems

Implementing access control increases your building’s security, as it’s harder to commit a crime if you can’t get into your premises in the first place! Additionally, in the event of a security incident, you have an account of everyone who was on the premises at the time. This can help with your own internal investigations and, in some cases, help the authorities with theirs.

While on the subject of information security, access control doesn’t just apply to your physical assets but your digital assets too. As cybercriminals are becoming increasingly better at breaking into your IT networks, it’s worth looking into boosting your cybersecurity measures too.

Security Lighting

Well-lit environments reduce the opportunities for criminals to skulk around in the shadows near your premises. Increasing the amount of security lighting strategically positioned around your property makes anyone making an approach more conspicuous. Motion-activated lighting is even better in this regard – as it provides the added benefit of startling any potential perpetrators, as well as making them more visible.

In addition to installing securing lighting on the property itself, be sure to illuminate areas your employees have to pass through on their way into and out of the premises. This includes car parks, alleyways, and other poorly-lit areas where your staff could be most vulnerable.

Perimeter Fences And Security Screens

Much like the presence of security cameras, a robust fence is an effective deterrent to criminal activity as it demonstrates a commitment to security. Boosting your perimeter fencing is an effective EOFY security upgrade, which could involve a fresh assessment of your site’s external boundaries, and repairing or upgrading weak sections.

Better still, you could make your perimeter even more secure by installing photoelectric beams that allow you to pinpoint the exact location of a security breach.

Similarly, installing security cameras along the fenceline both increases the deterrent aspect and grants visibility of what’s happening on the boundaries of your property. Security screens, like Crimsafe, perform a similar function to perimeter fencing, by adding another impediment to forced entry. By slowing criminals down, security screens create more opportunities for their presence to be detected by security cameras, or for them to trigger a sensor, both of which increase the chances of them getting caught.

Claiming Instant Asset Tax Write-Offs for Security Upgrades

How to claim the tax asset write-off for security upgrades

To claim an instant asset tax write-off, companies must choose to access the simplified deduction rules and claim the write-off on the asset in their tax return within the same year it was purchased and installed or used. As it relates to your security-related purchases, put down every security measure that costs less than $20,000 as an asset write-off on your tax return. Additionally, as with any tax-deductible expense, it’s essential to keep all the receipts and invoices for all purchased security upgrades.   

The importance of consulting your accountant about EOFY security purchases

Figuring out which assets are eligible and the threshold that applies to them can prove tricky. This is especially true when calculating potential tax savings on assets purchased in previous years. Attempting to do this yourself is complex and time-consuming, especially if you also have to deal with the day-to-day operations of your company.

For your accountant, on the other hand, tax, financial, and business matters are their day-to-day, and they know all the small details and regulations to save you money on your tax bill. With this in mind, it’s crucial to consult your accountant to successfully claim the maximum tax deductions on your business security upgrades.

Summary

To summarise:

• An instant asset tax write-off allows businesses to claim an immediate deduction for the cost of eligible assets, which includes business security equipment and upgrades.
• To claim an instant asset tax write-off, a company must have an annual turnover of less than $10 million – though there are exceptions. Additionally, the $20,000 threshold is applied per asset, allowing businesses to write off multiple assets.
• Certain assets aren’t eligible for an instant asset tax write-off, such as:
  • Capital works, i.e., buildings and structural improvements.
  • Assets that are leased out or are expected to be
  • Certain horticultural plants
  • Some types of software
  • Assets used in R&D activities
• Benefits of investing in security upgrades include:
  • Deterring criminal activity altogether
  • Increased employee safety
  • Protection of company assets
  • Reduced internal theft
  • Lower insurance costs
• EOFY security purchases and/or upgrades to consider should include:
  • Security cameras
    • Active deterrent cameras
    • ANPR cameras
    • Thermal imaging cameras
  • Alarm systems
    • Self-monitored: respond to security incidents yourself
    • Professionally monitored: your business is monitored 24/7 by a security company that responds to security events on your behalf
  • Access control systems
  • Security lighting
  • Perimeter fences and security 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 and we recommend you speak to your accountant before making a purchase for the purpose of instant asset tax write off.