Small and medium businesses around the country have been given another 12 months to take advantage of the federal government’s $20,000 instant asset tax write-off scheme.
Small Business Minister Michael McCormack said on Tuesday evening the government is ‘backing’ small businesses by extending the popular scheme, which was first introduced in the 2015 federal budget.
The scheme was due to expire on June 30, 2017, however, McCormack said earlier in May he was “hopeful” the tax break would be extended.
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The scheme was initially available to businesses turning over up to $2 million annually and this threshold was extended to $10 million in annual turnover after the government won Senate approval for the first phase of its 10-year enterprise tax plan earlier this year.
Businesses with an annual turnover of up $10 million will now have until June 30, 2018, to immediate deduct eligible assets up to the value of $20,000.
“In the past few months, I have met hundreds of small businesspeople on my nationwide small business roadshow,” Minister McCormack said in a statement accompanying the budget papers.
“I have heard firsthand how helpful the instant asset write-off is for many small businesses to invest in the capital equipment they need to grow and – importantly – create more jobs.
“I have heard how it helps small businesses invest in their business and replace or upgrade their assets.”
McCormack said the 12-month extension “continues the government’s support for small businesses to pursue new ideas, invest in themselves and create more jobs”.
The extension is likely to be welcomed by members of the small business community, with SmartCompany readers saying retention of the instant asset write-off scheme was a high priority when surveyed in the week before the budget.
The extension of the scheme is projected to cost $650 million over the four-year forward estimates period.