• Instant asset write-off for small business extended for 12 months

Instant asset write-off for small business extended for 12 months

The Government will extend the current instant asset write-off for Small Business Entities (SBEs) that it introduced in the 2016 Budget by 12 months to 30 June 2019. The threshold amount was due to return to $1,000 on 1 July 2018.

To take advantage of the write-off, the taxpayer must be a business with aggregated annual turnover of less than $10 million. However, as a result of this announcement, SBEs will continue to be able to immediately deduct eligible assets costing less than $20,000 which are first used or installed ready for use by 30 June 2019 for a taxable purpose.

This concession extends to small business simplified depreciation pools and continues to allow eligible taxpayers to place assets valued at $20,000 or more (that cannot be immediately deducted) into a small business simplified depreciation pool and depreciate these assets at 15% in the first income year and 30% each income year thereafter. In addition, the concession continues to allow taxpayers to write-off the pool balance where the total written down value is less than $20,000.

BDO Comment

While BDO embraces the extension of the write-off, providing long term incentives as opposed to uncertain year on year extensions would be preferable. This will allow SBEs to plan large asset purchases without imposing artificial deadlines.