Budget 2024: $20,000 instant asset write-off extended again almost 10 years after is started
Small businesses will have another 12 months to access the instant asset write-off, with the government set to extend the measure in Tuesday’s budget.
Small businesses will have another 12 months to access the instant asset write-off, with the government set to extend the measure in Tuesday’s budget.
Australian businesses with annual turnover below $10 million can currently use the write-off for purchases up to the value of $20,000, claiming a full tax deduction at an accelerated rate.
Last year’s budget extended the existing write-off into this financial year, instead of allowing it to revert to a threshold of $1000, however, legislation for the extension has yet to pass parliament.
It will now be extended through to the end of June 2025, reports the Australian Financial Review.
The extension of the instant asset write-off is expected to feature alongside other tax incentives for businesses in the Labor government’s third budget.
The small business community will likely welcome the extension, however, there have been calls to lift both the eligibility threshold and the write-off value.
The federal opposition has argued the turnover threshold should be set at $50 million and businesses should be allowed to immediately write off assets up to the value of $30,000.
The Council of Small Business Organisations Australia (COBOA) and others have called for the write-off value to be raised to $150,000.
Such an extension would put the policy closer to what became available to businesses in mid-2020, but much lower than the temporary full-expensing measure that was rolled out later in 2020, and which allowed businesses with annual turnover under $5 billion to immediately deduct the full value of all new, eligible, depreciable assets of any value.
“The instant asset write-off is an example of a program that Australia should be backing: it’s a tax incentive that promotes investment into productive capacity by small businesses. Small businesses make up 97% of all businesses in Australia so it’s disappointing the threshold for the program has not been increased. The program needs to be given certainty over the forward estimates rather than the annual routine of a budget announceable,” said COSBOA CEO Luke Achterstraat.
“It is quite ironic this extension has been announced when the legislation for 23-24 has still not passed. Small businesses make investment decisions over periods of months and years and deserve better certainty regarding the instant asset write-off,” Achterstraat added.
The current level is similar to the $20,000 instant asset write-off that was first introduced by the Coalition in 2015, and extended in 12-month increments over a number of years.
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