Yahoo Lifestyle Federal Budget 2024: $20,000 tax break confirmed for these Aussies
The instant asset write-off scheme for small businesses has been extended for another year.
Small businesses received a $20,000 tax boost in the federal budget after the instant asset write-off scheme was extended for another year.
Australian small businesses will be able to claim an immediate tax deduction on the full cost of eligible assets costing less than $20,000 for another 12 months.
Treasurer Jim Chalmers confirmed the scheme will now be extended through to the end of June 2025. The scheme was extended into this financial year in last year’s budget but is yet to pass parliament.
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"In defence, in energy, in resources and right around our economy – we want Australian small businesses to share in the big opportunities ahead as well," Chalmers said.
The government will provide $290 million to extend the scheme. Other sweeteners in the budget for small businesses included $25.3 million to improve payment times and $23.3 million to increase eInvoicing adoption.
The budget will also give energy bill rebates of $325 to around one million small businesses, along with $300 rebates for all Aussie households.
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How does the instant asset write-off scheme work?
Small businesses with an annual turnover of less than $10 million will be able to immediately deduct the full cost of eligible assets costing less than $20,000.
For the current financial year, it applies to assets that are first used, or installed ready for use between July 1, 2023 and June 30, 2024. The scheme would run to June 30, 2025, under the extension.
The $20,000 instant asset write-off will apply on a per asset basis, so small businesses can instantly write off multiple assets.
Assets valued at $20,000 or more (which can’t be immediately deducted) can continue to be put into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year after that.
Budget measure yet to be passed
This year’s extension, which was promised in last year’s budget, needs to be legislated by June 30.
The Coalition has argued the annual turnover should be lifted to $50 million and the write-off amount increased to $30,000. However, it has said it will pass the extension, even if the government refuses these expansions. It has also welcomed the budget's latest extension.
As it stands, businesses with an annual turnover of less than $10 million can claim the instant asset write-off for assets costing less than $1,000 for the current financial year.
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