It’s a great start to the new year for (bigger) small businesses. Around the country small businesses could be given another 12 months to cash in on the government’s $20,000 instant asset write-off scheme that was initially introduced in mid-2015.
Former Federal Treasurer Joe Hockey introduced a tax initiative where small businesses could write-off $20,000 worth of depreciating assets, such as vehicles, computers and various office equipment, back in 2015. Initially, the scheme was set to run from July 2015 to June 2017 but the deadline may be extended.
This tax initiative means businesses earning up to $2 MILLION can write off $20,000 worth of depreciating assets
Small business minister Michael McCormack says, “I have met with many Australians over the past six months who have used the asset write-off to improve their operations and expand their businesses.”
He adds, “From kitchen upgrades in a café in Forbes to offices with upgraded computers and photocopiers, new utes for tradies and almost everything in between, I have seen first-hand the benefit the $20,000 write-off can bring to businesses.”
One of the key small business policies in the 2015 federal budget, the $20,000 instant asset write-off allows businesses to instantly deduct the full value of income-producing assets purchased to the value of $20,000, instead of claiming the deductions over a number of years. Before the scheme was introduced, the instant asset write-off threshold for small businesses was $1000.
The scheme is available to businesses turning over up to $2 million annually. However, the government said in last year’s budget that it had planned to extend eligibility for the scheme to businesses who are turning over up to $10 million from July 1, 2016.
One catch of the write-off was that the asset needed to be installed and ready to use by June 30, 2017. By extending it, new small businesses and those who haven’t made use of it will be given more time.
McCormack says he is working with the Treasurer to ensure the 2017-18 Budget “delivers the confidence and investment Australia’s 2.1 million small businesses deserve while taking a responsible approach to Budget repair.”
His final word? “It is important the government considers measures which can encourage businesses expansion and the creation of new jobs, noting we are in a challenging Budget environment.”