Proposed changes to instant asset write-off legislation to benefit small businesses
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Proposed changes to instant asset write-off legislation to benefit small businesses
Under the changes, small businesses may immediately claim tax deductions on assets costing less than $25,000, with no limit on the number of assets to be claimed until 30 June 2020.
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Prime Minister Scott Morrison has announced the introduction of legislation to extend the instant asset write-off scheme for businesses until 30 June 2020 for assets purchased under $25,000 in value.
This increases the instant asset write-off threshold from $20,000 to $25,000 for the period from 29 January 2019 until 30 June 2020.
Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, said “The scheme allows small businesses to immediately deduct assets costing less than $25,000 instead of claiming deductions over a number of years and there is no limit on how many assets can be claimed.”
Ms Carnell welcomed the extension of the scheme and the increase to the threshold as “good news for small businesses looking to purchase a new or second-hand asset, such as a vehicle, printer or generator.”
“The small business sector represents 99% of all businesses in Australia, so this measure will give small businesses more opportunities to grow and thrive.”
Ms Carnell says small and family businesses need to remember that this is a tax deduction, not a rebate, so businesses will need to have sufficient profit to write off the new asset against.
“We will be working with the government, the Australian Taxation Office, industry associations, accountants and bookkeepers to ensure small business knows about this important opportunity,” she said.
Andrew Conway, the chief executive officer of The Institute of Public Accountants (IPA), said the IPA supports any increase of the threshold, adding “The extension of this initiative through to 2020 will give reassurance to small businesses looking to invest in their business for future growth.”
However, he hopes this will become a permanent feature of government policy.
“The IPA advocated for the introduction of this initiative and have continued to argue the case for the instant asset write-off to become a permanent feature of the small business tax regime and not just a ‘maybe’ come federal budget time each year.”
The proposal is not yet law and the legislation will be introduced by the Treasurer when Parliament resumes on 12 February 2019.
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