The latest Federal Budget came with a nasty surprise: The $20,000 instant asset write-off measure was not renewed for the 2025-26 financial year in the 2025 Budget. This means that you will only be able to write off next financial year’s business expenses up to the $1,000 ceiling.
The removal of the $20,000 write-off is set to have a big impact on how SMEs invest in their own operations, says registered tax agent Catarina Santini.
“For many SMEs, this incentive made investing in growth more accessible,” she explains. “It encouraged timely upgrades and helped ease the burden of reinvestment.”
What should you do now?
You might be tempted to rush out and buy that shiny new laptop or business vehicle before the write-off is gone.
And, in some good news, the 2024/25 iteration of the write-off was signed into law last night, after being in limbo this year due to disagreements between the two major parties.
But it’s still important to talk to your accountant before making any big purchases, to make sure you’ll get a good return on your investment.
“Small business owners need to fully understand their current tax position to really understand if investing in assets up to the instant asset write off threshold before 30th June will change or impact their cash flow and tax position,” says Stacey Price, a registered tax agent and accountant.
Price urges small-business owners to consider whether they really need new assets, what the cashflow implications are and what the potential benefits will be later.
“It is not a simple yes or no answer,” she adds.
Instead of thinking about new assets, small businesses may be better off focussing on their cash flow over the next 12 months, says Price. Aside from continued harsh operating conditions, you’ll also be better placed to deal with other new measures introduced in the latest Budget – like the payday super reform and further ATO scrutiny.
