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Australian Produce Industry Making the Most of the ATO Instant Asset Write-off Scheme

Wednesday, 4 April 2018
By Felicity Turner, The Yield

Technology is fundamentally changing the produce industry. Growers are making more accurate decisions on-farm based on having precise microclimate data at their fingertips and access to artificial intelligence (AI) driven predictions. Retailers are gaining greater access and insight into weekly peaks and troughs in produce availability, regardless of season, so they can plan for and market them accordingly. Growers and organisations along the entire supply chain are capitalising on the enormous benefits and competitive advantage that new technology brings.

As we find ourselves in the final months of the financial year, and end of financial year sales and discounts on major equipment start popping up, many of us start thinking seriously about investing in that new technology that will give us the edge.

The good news for many produce growers is that, in January 2017, the Australian Tax Office announced it would be extending the instant asset write-off threshold of $20,000 for small business though to 30 June 2018. This means that producers may be eligible for major tax incentives if they install new technology and equipment before the end of the financial year.

The instant asset write-off for producers
If growers purchase and install an asset that costs less than $20,000, they may be able to immediately deduct the business portion of that asset from their tax return. This means, if a piece of equipment is purchased for $19,999 in the 2017-18 financial year, growers may be able to reduce their taxable income (and therefore, tax payable) for the same financial year by $19,999.

Determining eligibility
In order to be eligible for the write-off, growers must have a turnover of less than $10 million for the year in which the tax deduction is being claimed, i.e. the 2017-2018 financial year. The asset must also be first used or installed and ready for use in the 2017-2018 financial year.

Importantly for many growers, there is no limit to the number of assets that can be claimed under the instant asset write-off; it can be applied to each asset less than $20,000, regardless of how many assets fall into that category.

Investing in microclimate prediction technology
The Yield’s Sensing+™ solution uses sensors to measure microclimate data from around the farm and applies artificial intelligence and data science to provide information that helps growers make decisions like when to plant, harvest, irrigate, feed and protect their crops. Sensing+™ records, interprets and predicts growing conditions and builds a detailed picture of the microclimate across a range of conditions.

As growers consider investing in the technology before the end of financial year, it’s important to note that Sensing+ for Agriculture is sold as a system made up of separate, standalone pieces of hardware, connected together. That means no matter how many sensors or gateways a grower needs, each piece of hardware would be treated as a separate asset under the immediate asset write-off rules.

Speak to your accountant
The instant asset write-off makes for a particularly compelling incentive to take advantage of this financial year, as the threshold is anticipated to drop to assets that costs less than $1,000 as of 1 July 2018.

With the tax deadline looming, growers are urged to speak to their accountant or financial advisor soon to confirm their eligibility and ensure installation of new technology and equipment before the end of financial year.

Felicity Turner is the general manager, customer experience, at The Yield. The Yield is an Australian agricultural technology company on a mission to transform food and farming practices with scalable digital technology. The Yield uses Internet of Things (IoT), data science and artificial intelligence (AI) to power its technology being used to solve real challenges at farm level and throughout the food chain. More information at www.theyield.com

Instant asset write-off: http://go.theyield.com/2018-immediate-asset-writeoff.html
 

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