Did you know that as part of the governments COVID stimulus package, the threshold for low value assets has been temporarily raised from $500 to $5,000?
So what does this mean in practice? Historically any asset purchased over the value of $500 had to be added to your Balance Sheet and depreciated over the estimated life of that asset. This meant that you could only claim a portion of the total purchase (the depreciation) as a tax deduction each year.
Up until the 16th of March 2021 the threshold has been increased to $5,000 so you can claim the full cost as a tax deduction and reduce your tax bill for the 2020/21 tax year.
For example if you buy a new laptop for $2,000 before 16th of March you can claim the full expense as a tax deduction instead of just the depreciation portion.
If you are considering upgrading any equipment we recommend taking action urgently as worldwide stock levels are low and there are delays in getting new equipment delivered.