Latest News

Hot Issues
spacer
2025 Tax Planning Guide Part 2
spacer
From 1 July 2025 ATO Interest is no longer tax deductible
spacer
SME confidence and conditions see uptick over Q1 2025, survey reveals
spacer
Depreciation expert urges property investors to leverage tax depreciation
spacer
Buy a business
spacer
Upskilling and self-education costs
spacer
How secure is your super account?
spacer
Freshwater Resources by Country 2025
spacer
Why Might a Lease Dispute Occur?
spacer
2025 Tax Planning Guide Part 1
spacer
$20,000 instant asset write-off
spacer
New Bunnings scam warning
spacer
The Largest Empires in the World's History
spacer
All the documents, fact sheets and downloads to do with this year’s 2025-26 Federal Budget
spacer
Winners and Losers - Federal Budget 2025-26
spacer
Building Australia's future and Budget Priorities
spacer
ATO outlines focus areas for SMSF auditor compliance in 2025
spacer
ATO to push non-compliant businesses to monthly GST reporting
spacer
ASIC pledges to continue online scam blitz
spacer
Tax Office puts contractors on notice over misreporting of income
spacer
Tax planning tips for 2024-2025
spacer
What does the proposed changes to HELP loans mean?
spacer
Vacant Residential Land Tax
spacer
The Most Held Currencies in the World | 1850-2024
spacer
Salary sacrifice and your super
spacer
5 Clauses Tenants Should Look For When Reviewing a Lease
spacer
ASIC continues crackdown on dodgy directors
spacer
Vehicle association calls for stricter definitions with luxury car tax changes
spacer
Government to push ahead with GIC deduction changes
spacer
Exploring compassionate early release of super
spacer
Have you considered spouse contribution splitting?
Article archive
spacer
Quarter 1 January - March 2025
spacer
Quarter 4 October - December 2024
spacer
Quarter 3 July - September 2024
spacer
Quarter 2 April - June 2024
spacer
Quarter 1 January - March 2024
spacer
Quarter 4 October - December 2023
spacer
Quarter 3 July - September 2023
spacer
Quarter 2 April - June 2023
spacer
Quarter 1 January - March 2023
spacer
Quarter 4 October - December 2022
$20k instant asset write-off to get 1-year extension

The amendment will hold off the threshold reverting to $1,000 until June 30 next year.

 

.

Small businesses will be able to claim an immediate deduction for assets less than $20,000 under amendments to the Income Tax (Transitional Provisions) Act 1997 introduced to Parliament on Wednesday.

Nearly four million small businesses with an annual turnover under $10 million will be eligible under the scheme, which is estimated to cost the government $290 million over five years.

Treasurer Stephen Jones and Minister for Small Business Julie Collins said in a joint statement that the instant asset write-off scheme would encourage businesses to invest in more capital resources.

 

“The $20,000 instant asset write-off will help improve cash flow and reduce compliance costs, while the Small Business Energy Incentive will ease pressure on energy bills and help small businesses become more energy efficient,” they said.

 

“The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets. This is targeted, responsible support, to help Australia’s small businesses continue to grow.”

 

“Small businesses are the engine room of Australia’s economy, which is why these new measures are so critical.”

The Tax Institute senior advocate Robyn Jacobson said she was pleased to see the temporary increase in the write-off threshold but said there would be “minimal revenue impact” due to the costs to the government.

Ms Jacobson added that the “constant tinkering” of the scheme has made it difficult for businesses to keep on top of current laws.

“While there may be concerns about the inflationary impact of allowing immediate deductions for the cost of certain depreciating assets, what is paramount in a good tax system is simplicity, certainty and efficiency,” she said.

She suggested introducing a permanent scheme for small to medium businesses with an annual turnover of less than $50 million and for assets costing less than $50,000.

“Annual changes increase the risk of errors and result in uncertainty, particularly when the measure will apply from 1 July 2023 this year and the amendments have not yet been legislated,” she said.

The scheme’s genesis can be traced back to a $1,000 deduction introduced by the Gillard government in 2012 and it has undergone a raft of changes in the last decade in response to changing economic conditions.

As part of the COVID-19 measures, the government scaled up the threshold to $150,000 and increased eligibility to encompass businesses with a turnover limit of less than $500 million.

The latest amendment, announced in the 2022–23 federal budget, will scale back the write-off and eligibility limits back to $20,000 for small businesses only.

Ms Jacobson said that “while this will feel like a reduction of what was available throughout the pandemic until 30 June 2023 under the temporary full expensing measure, people should be aware that it’s actually an increase as the write-off threshold would have otherwise reverted to $1,000 from 1 July 2023 without this measure”.

The change was part of a broader array of measures introduced for small businesses on Wednesday.

The bill will also create a 20 per cent deduction for businesses that make less than $50 million annually buying equipment that supports electrification or efficient energy use this financial year.

“The new small business energy incentive builds on the Albanese government’s measures to help small businesses become more energy efficient and ease pressure on their energy bills,” Mr Jones and Ms Collins said.

 

 

 

Christine Chen
15 September 2023
accountantsdaily.com.au

Liability limited by a Scheme approved under Professional Standards Legislation.
© O'Brien and Partners 2024 - All Rights Reserved | 333 Canterbury Road, Canterbury VIC 3126 | Tel: 03 9509 3911 Site by Acctweb