Written by Daniel Dubois & Shara Cox

As we approach the end of the financial year, the Instant Asset Write-Off (IAWO) presents once more a valuable opportunity for small business owners - particularly those businesses with the need for consistent equipment upgrades such as computer systems .

The time to act is now, with the ATO making a late (April) announcement, with extension of the concession for assets acquired and installed before 30 June 2026.

The Current Rules - What We Know

For the 2026 financial year, eligible small businesses can immediately deduct the business portion of assets costing less than $20,000 each.

To qualify, assets must be:

First used or installed ready for use between 1 July 2024 and 30 June 2026
Cost less than $20,000 per asset (excluding GST)
Used by a business with turnover under $10 million

Importantly, the threshold applies per asset, not per purchase or invoice.

Looking Ahead - FY27 Uncertainty

At this stage, there is no confirmed extension of the Instant Asset Write-Off beyond 30 June 2026.

While the concession has been a consistent feature of the tax system for over a decade - often extended at the last minute as with this year’s announcement - there is no guarantee this will continue into the 2027 financial year.

This creates a window of opportunity now, but also a level of risk in waiting.

Why This Matters for Business Owners

For businesses investing in equipment, the structure of purchases can make a significant difference.

Using a typical POS setup as an example, this includes multiple components:

Computers/Terminals
Receipt printers
Barcode scanners
Cash drawers
EFTPOS hardware
Back-office devices

In many cases, each of these items is considered a separate asset. If each costs less than $20,000, they may all be immediately deductible - even if purchased as part of a broader upgrade.

This can:

Reduce taxable income in the current year
Improve short-term cash flow
Make upgrades more financially accessible

A Word on Invoicing and Compliance

While there is flexibility in how assets are invoiced, it’s important to stay within the rules.

It is generally acceptable to:

Invoice genuinely separate assets individually
Purchase components at different times
Separate equipment across locations or business entities

However, care must be taken not to artificially split a single asset to fall under the threshold. If the Australian Taxation Office considers items to be one integrated asset, the total cost will be assessed as a whole - regardless of how it is invoiced. In that case the asset would need to be depreciated rather than deducted in one go.

Acting Before 30 June

With the current rules legislated only through to 30 June 2026, businesses considering upgrades may benefit from acting sooner rather than later - particularly where installation can be completed before year-end.

Delays in ordering, delivery, or installation could mean missing eligibility altogether.

Key Takeaway

The Instant Asset Write-Off remains a powerful tool - but one that is dependent on timing and correct application.

With uncertainty ahead, now is an ideal time for business owners to:

Review planned equipment purchases
Consider bringing forward upgrades
Ensure assets can be installed and ready for use before 30 June

As always, while the rules can provide opportunities, individual circumstances matter. We recommend speaking with your Salt adviser to confirm how the Instant Asset Write-Off applies to your situation and to ensure any purchases are structured correctly.

Instant Asset Write-Off FY2026: a late opportunity for deductibility