Nearly 300,000 small businesses have taken advantage of the Federal Government’s $20,000 instant asset tax write-off scheme, according to 2015-16 tax office data.
The data was revealed by Minister for Small Business Michael McCormack, who described the instant asset write-off program as a “shot in the arm” for small businesses.
“The instant asset write-off is directly helping small business bottom lines and improving cash flow for small business which means more investment in local communities, higher wages and more local job opportunities,” he said.
“In 2015-16, the number of claims increased by 50,550 and the average amount claimed increased by $4,065 to $9,000. This means more money in the pockets of small businesses so they can grow their businesses, employ workers and pay them more.
The instant asset write-off scheme was originally set to conclude after 30 June 2017; however, the Government announced in the Federal Budget, earlier this year, that it would be extended until 30 June 2018.
Under the scheme, businesses with an annual turnover of up to $10 million can immediately deduct assets costing less than $20,000, instead of claiming deductions over numerous years. It is on a per asset basis allowing multiple claims for assets costing less than $20,000 to be deducted.
“Cash flow is so important for small business operators and the instant asset write-off means that tradies can invest in better tools, cafes and restaurants can upgrade their equipment and all small businesses can reinvest to grow their business,” McCormack said.
“These great results are set to continue with tens of thousands more small businesses able to access the instant asset write-off thanks to the Government’s increase in the small business turnover threshold to $10 million per year.
Although the extension of the instant asset write-off has generally been welcome, there have been calls for it to become a permanent fixture from the likes of Tim Reed, the CEO of accounting software provider MYOB and Andrew Conway, CEO of the Institute of Public Accountants (IPA).
See also: Federal Budget: small business $20k instant asset write-off scheme extended by one year
