Politics

Budget 2017: SMEs given 12-month extension for $20,000 instant asset tax write-off scheme

Eloise Keating /

Michael McCormack

Small Business Minister Michael McCormack. Source: AAP Image/Andrew Taylor

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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.

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.

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Eloise Keating

Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.

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  • Jay

    Is anyone able to clarify if the change from $2m to $10m turnover is of immediate effect or does that change only kick in as of July 2018? I.e. would a $4m turnover (previously ineligible) business now be able to put a claim in for this current tax ending June 30th 2017?