Tax Deductions: Purchase A Desky Office Desk As A Business Asset

At the start of May, the Government announced that the expanded instant asset write off scheme was to be extended up until 30 June 2024. This could potentially save small businesses thousands of dollars in tax write-offs - and makes this the perfect time to invest in depreciable assets, and improve your workspace and worker productivity in the process.

It is worth noting these rules have not passed as law yet – similar to last year they didn’t pass the technology boost until 1 week before end of financial year so do keep an eye on this space to ensure you are relying on the most up-to-date information.

the instant asset write-off threshold was due to drop back to $1,000 from 1 July 2023, the Government has introduced a Bill to Parliament which contains amendments to ensure that a $20,000 threshold will apply to small business entities for the 2024 income year.

It is worth noting also that businesses are also able to claim full deductions for the cost of improvements made to existing depreciable assets. Individuals can also claim under the scheme as employees, but only up to $300 - items over this amount would need to be depreciated.

The initial scheme was welcome news for many Australian SMEs, allowing them to upgrade their assets and see the fruits of the tax deduction benefits in the current tax year - and so the extension has been greeted with understandable enthusiasm. If this is the first you’re hearing of the scheme, however, don’t worry - there’s still plenty of time to take advantage before the end of this financial year.

Instant Asset Write-Off Scheme Extended Until June 2024

The instant asset write-off scheme enables businesses to write off the tax on the entire amount of depreciable asset purchases in the financial year they were purchased. Pre-COVID, in many instances a business purchasing an asset could only write off a portion of that assets expense, and would often have to reclaim over several years.

By deducting the full expense in a single year, businesses can decrease their taxable income and, therefore, the tax they pay out of this year's budget. Designed to stimulate the economy post-COVID, the scheme aims to help businesses invest and grow over the next few years, to try and offset the shrink in the economy caused by lockdown.

The rules

For a small business entity to access the instant asset write-off threshold of $20,000 the following conditions need to be satisfied:

• The entity must carry on a business under general principles in the 2024 income year;
• It must have aggregated annual turnover of less than $10m;
  • This can be based on current year or previous year figures;
• It must choose to apply the simplified depreciation rules for the 2024 income year;
• The asset must have a cost of less than $20,000; and
• The asset must be first used, or installed ready for use, for a taxable purpose between 1 July 2023 and 30 June 2024.

It is important to note that if a small business entity does not choose to apply the simplified depreciation rules for the 2024 income year then it won’t have access to the instant asset write-off rules, regardless of whether the other basic conditions can be met.

The write-off threshold applies per asset, so a small business entity can potentially deduct the full cost of multiple assets across the 2024 year as long as the cost of each asset is less than $20,000.

Using the instant asset write off, you can claim a deduction on your tax return for the full cost of items such as tools and machinery, IT hardware, equipment and, crucially - office furniture.

In fact, there may never be a better time than now to upgrade your office furniture. Standing desks are already linked to a marked increase in employee wellbeing, and as a result, productivity. And after a rough few years, now might be the perfect time to invest in your staff anyway.

If, up until now, you have always held back on upgrading your workspace because of the delay in cash flow between purchasing the asset and receiving the tax benefit, then taking immediate advantage of the instant write-off initiative may well be appealing. With only a month to go until the end of the financial year, a purchase made now could make you a near instant tax saving - and purchases made right up until 30 June 2024 can be claimed in the next tax year.

Claim A Hefty Tax Deduction On Your New Standing Desk

Save Tax And Boost Productivity With New Office Equipment

• Help to boost circulation and increase energy levels in employees.
• Proven to help to prevent obesity and related health problems.
• Known to be an aid in preventing postural, muscular and repetitive strain injuries.
• Minimise sick days lost as a result of ill health and injury.
• Healthy, happy staff are shown to be more productive.

Purchase Your Standing Desk Before The End Of June As Part Of The Instant Asset Write-Off Scheme

Before the Instant Asset Write-Off scheme, it was more difficult to claim taxes back from write-offs over the amount of $1000. But a deduction on a standing desk purchase is now considered within the current instant asset write-off scheme, if purchased before the end of June (for this years tax return, that is - the scheme has been extended until June 2024).

A desk from Desky could be the perfect purchase for your new office fitout. And it makes perfect business sense to order yours before the deadline! If you’re tempted to take advantage of the tax breaks on offer and want to improve your office, your staff’s wellbeing, and ultimately your output, see our office desk range to help you select the best desk for your office.

Please Note: This article is general in nature and should not be taken as financial/tax advice - please contact your accountant to see what your business is eligible for.