Following lobbying from small business advocates and the opposition, the Morrison government has announced it will extend the $150k instant asset write-off until December 2020.
Businesses making up to $500 million per year will be able to write off new assets worth up to $150,000 each under the extended scheme which was part of a raft of stimulus changes legislated to boost cash flow during the coronavirus crisis. The scheme which was slated to end on July 1 will now continue until December 31 2020.
Announcing the extension of the scheme, Treasurer Josh Frydenberg said the extension would allow business owners to begin investing back into their business.
“We do know that there are businesses that are ready to invest right now. When the restrictions are eased and people are back at work, our cafes and restaurants will be busy. Our hotels will have occupants again and our businesses will be able to export and import again, and they need the equipment and they need the machinery.”
Minister for Small Business Michaelia Cash said the measures will support over 3.5 million businesses employing more than 9.7 million employees.
“They are designed to support business sticking with an investment they had planned, and encouraging them to bring investment forward to support economic growth over the near term.
The instant asset write-off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided each costs less than $150,000,” Cash confirmed.
“The extension will also give businesses additional time to acquire and install assets, as they will now have until the end of the year. Assets can be new or second hand and could include for example a truck for a delivery business or a tractor for a farming business.
“Businesses that adopt substituted accounting periods will also be able to benefit from the $150,000 instant asset write-off, providing all other eligibility requirements, including with respect to the date of purchase and installation or use of assets, are met.”
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