Small business instant asset write-off scheme
When Scott Morrison handed down the Budget 2017-2018 this month, it was to the mantra “about making those right choices, to secure the better days ahead”
But what does this mean for small businesses? Good things if you’re in need of upgrading or adding new assets for the organisation.Our Budget picks...
Our top three picks from this budget for Small Businesses include:
- The extension of the instant write-off for eligible assets costing less than $20,000, for an additional 12 months to June 2018
- The increased number of businesses eligible for a range of small business tax concessions with the turnover threshold being increased from $2 million to $10 million per annum
- Reducing the Commonwealth regulatory (red tape) burden on businesses and the community by more than $5.8 billion
The combination of these actions allows small business owners to focus on growth through freeing up time ordinarily spent on red tape and improve cash flow through providing support for the purchase of business assets – to secure better days ahead
Take advantage before June 30th
If your business falls within this threshold, we strongly recommend you talk to your accountant on how you can leverage the $20,000 instant write-off scheme for this financial year 2016/17. Eligible assets* can include PCs, Servers, Phone Systems or any other hardware you may require to keep your business running smoothly.
As the recent “WannaCry” outbreak demonstrated, ageing systems can lead to risks in business security. If you have been thinking about upgrading in the next few months, now is the time to consider taking advantage of this scheme.
Contact us today on 1300 307 907
For more information or to discuss your hardware requirements or security concerns.
* The Government will extend the 2015‑16 Budget measure Growing Jobs and Small Business — expanding accelerated depreciation for small businesses by 12 months to 30 June 2018 for businesses with aggregated annual turnover less than $10 million. This measure is estimated to have a cost to revenue of $650.0 million over the forward estimates period.
Small businesses will be able to immediately deduct purchases of eligible assets costing less than $20,000 first used or installed ready for use by 30 June 2018. Only a few assets are not eligible (such as horticultural plants and in‑house software).
Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool (the pool) and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools).
The current ‘lock out’ laws for the simplified depreciation rules (these prevent small businesses from re‑entering the simplified depreciation regime for five years if they opt out) will continue to be suspended until 30 June 2018.
This measure will improve cash flow for small businesses, providing a boost to small business activity and investment for another year.
From 1 July 2018, the immediate deductibility threshold and the balance at which the pool can be immediately deducted will revert back to $1,000.