The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has welcomed the passing of legislation to extend the $20,000 instant asset write-off for a further 12 months.
“This gives small businesses and family enterprises more time to invest in their business, and buy the equipment they need to grow and prosper,” Ms Carnell said. “That might be a new computer, photocopier, cash register, restaurant oven or a second-hand printer or generator – as long as they have been purchased for less than $20,000. There is no limit on how many assets can be claimed.”
Ms Carnell stressed, however, that she will still continue to push for embedding the instant asset write-off in legislation and raising the threshold to at least $100,000.
“For capital-intensive businesses, $20,000 is too low. For example, if you’re a farmer and you want to buy an asset like a tractor, you’re not going to get one for anywhere near the $20,000 threshold,” she explained.
The Ombudsman said the small businesses that claimed the instant asset write-off last year soon realised the financial advantage of doing this.
“The claim process is quite simple – all you have to do is include it in the appropriate section of your tax return paperwork,” Ms Carnell said.
There are some exclusions, which can be found on the Australian Taxation Office website, as well as other useful information.
“Small businesses and family enterprises need to remember that this is a tax deduction, not a rebate – so you need to make a profit to claim the benefit. So make sure you really need the asset before purchasing, and we don’t encourage people to go into debt to take advantage of the write-off,” Ms Carnell said.