At Roger Boghani, we get excited when a new Financial Year starts. It’s a great time to help small businesses. We either wrap up their accounts for the 24/25 Financial Year or start planning for the next one.
In the past two Financial Years, the ATO has raised the limit on the Instant Asset Write-Off (IAWO) program. They bumped it up to $20,000. This change lets businesses that make less than $10 million a year expand, upgrade, and invest more.
Although the IAWO limit drops from $20k to $1k for the 25/26 FY, companies that haven’t finished their returns for 24/25 should review their spending and make sure they maximise their returns.
This guide explains the basics and offers expert tips your accountant can give, whether you’re new to the rules or trying to get the most out of this tax break.
✅ The Instant Asset Write-Off explained
✅ Who qualifies for 2024-25
✅ Eligible assets
✅ How to make the most of your claim
✅ Why an accountant helps you capture all benefits
What Is the Instant Asset Write-Off?
The Instant Asset Write-Off (IAWO) helps small businesses save on taxes. It lets them subtract the entire cost of assets they can use right away (up to a limit) in the year they buy and install them. This beats stretching the cost across several years.
Key Changes for 2024-25
- The full expensing program has ended, but small businesses can use the IAWO for the 24/25 returns.
- Eligible businesses can claim assets that cost up to $20,000 each.
Who Can Claim, And What Assets Qualify?
- Eligibility: Businesses that earn less than $10 million a year can use the $20,000 instant asset write-off until June 30, 2025.
- Asset Requirements: Each item must have cost under $20,000. You can claim instant deductions for multiple eligible purchases, as the deduction applies to each asset.
- Office equipment (computers, printers, furniture)
- Tools & machinery (for tradies, manufacturers, etc.)
- Vehicles (if they cost less than $20,000)
- Technology & software (POS systems, laptops)
- Renovations & fit-outs (if they’re part of an eligible asset purchase)
What’s NOT Eligible?
❌ Assets you lease (not own)
❌ Capital works (like building extensions)
❌ Assets you bought before July 1, 2023 (different rules apply)
- Timing Is Key: You must have started using the asset (or had it ready to use) between July 1, 2024, and June 30, 2025.
- New and Used: Both types of assets qualify if you use them for business reasons.
- What’s Left Out: Some assets don’t make the cut (like horticultural plants, building construction, or leased assets); double-check the details or ask your accountant.
How Can the Instant Asset Write-Off Help Your Business?
- Immediate Tax Deduction: This reduces your business’s taxable income for that year right away.
- Better Cash Flow: The money you save on taxes can go into hiring, buying stock, or helping your business grow faster.
- Encourages Updates: You can purchase new tech, vehicles, equipment, or tools with confidence knowing they’ll make your business run more and keep you ahead of the competition.
Example: Picture this: a company buys a work truck for $18,000 (GST not included) in July. Instead of spreading the cost over several years, they can claim the entire $18,000 on their tax return, saving money.
How to Make the Most of Your Instant Asset Write-Off
- Map Out Your Purchases
- Assets you started using, or set up to use, between July 1, 2024, and June 30, 2025, qualify for the 2024–25 scheme window.
- Get Your Timing Right
- If you bought something big (like equipment, computer upgrades, or vehicles), ensure it cost under $20,000 and you used it before the cutoff date.
- Grab Several Qualifying Items
- The limit applies to each item, so you can split your purchases (such as multiple computers, tools, or even fixtures) to maximise your tax deductions.
- Document Everything Carefully
- Hang on to all receipts, invoices, and proof that show you use the assets for business. If you don’t have good records, you might lose deductions or face problems if you get audited.
- Check Exclusions Carefully
- Some types of assets and how you use them don’t make the cut. An accountant can help you figure out if something you want to buy fits the instant write-off rules.
- Work With Your Accountant
- Team up with your accountant to plan purchases, bundle claims, or manage cash flow.
How Your Accountant Can Help You Get It Right
A skilled accountant becomes your best friend when handling the instant asset write-off for three key reasons:
- Compliance You Can Count On: They ensure your purchases qualify, stick to the timing rules, and avoid typical mistakes.
- Getting the Most Tax Savings: They can adjust how and when you buy assets to get the biggest deduction if you’re planning to invest in several items.
- Easy Bookkeeping and Filing: Accountants handle the record-keeping and reporting, keeping claims accurate, paperwork complete, and you prepared for any audit.
Usual Mistakes and How to Sidestep Them
- Buying Too Late: You must have set up or used assets before June 30, 2025.
- Going Over the $20,000 Limit: Any asset that costs more than $20,000 doesn’t qualify, and you’ll need to spread its depreciation over time.
- Trying to Claim Personal Stuff: Claim the part you use for business. You can’t claim the personal use portion.
- Not Thinking About GST Status: If you’re registered for GST, use the asset’s price without GST; if you’re not registered, use the price with GST to figure out if it qualifies.
The Bigger Picture: Why You Should Act Now
The instant asset write-off threshold has returned to just $1,000 from 1 July 2025, so the $20,000 cap offered a brief opportunity to invest in your business and save real money.
Final Words: Take Advantage of This Opportunity, Consult Your Adviser
If you maximised the IAWO before the rules changed, you boosted your business’s finances. Even at the reduced rate of $1k, smart planning, wise asset decisions, and expert guidance from a qualified accountant like Roger Boghani can make a significant impact on your business.
Want to expand and save? Reach out to Roger Boghani now and transform this tax break into a business advantage.
