Hold on to your hats. Just weeks after the Government already announced an increase in the Instant Asset Write-Off from $20,000 to $25,000, tonight’s Federal Budget one-ups that.
And then some.
Now, companies will have access to a write-off up to $30,000.
The revenue threshold for accessing the write-off is raised from $10 million to $50 million, and it can be used multiple times for multiple assets.
The Government says 3.4 million businesses are now eligible for the write-off.
This is a huge win for SMEs, especially as the Government says more than 370,000 businesses have accessed the write-off already.
In tonight’s speech, Prime Minister Scott Morrison said the threshold will allow “a café to get a new fridge or grill, a plumber to buy new tools or a courier a new van”.
Expanding the threshold to $50 million, he said, will “cover an additional 22,000 businesses, employing 1.7 million Australians”.
The best part is, businesses can access the write-off right now.
The new $30,000 limit is effective from 2 April, at 7.30pm, to June 30, 2020. The downside is, this is still just a temporary arrangement, whether this Government makes it back after the election or not.
Of course, all the same rules apply.
Which means you need to make sure the asset is purchased and installed within that time period. It needs to be ready for use – you can’t just have it lying around and then plan to install it a couple of years from now.
That said, this is a significant improvement on the threshold and a sign the Government is still serious about investing in this particular benefit.
We would have liked to have seen it made permanent, but… you can’t have everything.
The increase is another reason why it’s so important for businesses to have their expense tracking and documentation under control.
Read more about the 2019 Federal Budget on our blog, including information on personal tax cut changes, more funding for small business spending on exports, as well as new rules for your ABN.
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