Asset write-off for Australian small businesses extended
The instant tax write-off for Australian small businesses buying assets for under $20,000 would be extended to June 2019.
The so-called instant asset write-off measure enables small businesses with annual turnover of under $10 million to straight away deduct purchases of most assets under $20,000.
“For small business we will once again extend the instant asset write off for businesses with a turnover up to $10 million for purchases of up to $20,000,” said Treasurer Scott Morrison.
It is undoubtedly a small win for Australian small businesses, which have embraced this scheme since it was introduced in the 2015 budget.
However, the announcement has also disappointed those in the small business community who had hoped to see this scheme become a permanent feature of the tax system.
After first being introduced in the 2015/16 budget, the scheme was extended in 2016/17 & was about to expire in this year June.
The 12 months extension of this offer is expected to improve cash flow for small businesses, as well as boost business activity & investment.
“Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the general small business pool (the pool) and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools),” said former ATO director and current head of tax communications at H&R Block, Mark Chapman.