After much speculation around just what the 2019 Federal Budget would include, on the 2nd of April 2019, the Federal Treasurer - Josh Frydenberg announced among other things, "additional tax relief for 3 million small sized businesses".
The Treasurer said during his budget speech, that “small businesses are the engine room of our economy,” adding that “they are integral to every local community.”
The additional tax relief offered came in the form of an extension of the existing “instant asset write-off scheme” which from the 2nd of April has been increased and expanded.
Now, small to medium-sized businesses with a turnover of less than $50 million (increased from $10 million) can write-off a purchased asset worth less than $30,000 (increased from $25,000) in their tax return that year.
The scheme is particularly valuable to businesses that are capital intensive, and require the purchase of machinery and equipment.
Frydenburg highlights the benefits in his budget announcement stating that the increase will allow “a cafe to get a new fridge or grill, a plumber to buy new tools or a courier a new van”.
CEO of the Australian Chamber of Commerce and Industry, James Pearson also sees the benefits of changes stating in a recent media release that “Expanding the size and accessibility of the scheme encourages more businesses to invest in productive equipment and technology and create more productive jobs."
Pearson goes further to say that “the higher threshold (up from the previous $20,000 to $30,000) and expansion of the write-off available to businesses with turnover up to $50 million (up from $10 million) are strong responses to our lobbying. And what is powerful is that the write-off is available for multiple assets as long as each one is under $30,000 value – not just the purchase of one asset each year.”
To ensure that all capital purchases (including building and asset acquisitions) are accurately and effectively reported for instant write-off or depreciation, we recommend the engagement of a professional quantity surveyor.
Capital Claims Tax Depreciation are quantity surveyors and tax depreciation experts. To discuss asset reporting and depreciation for your business contact our team for a free consultation on 1300 922 220.
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