Small businesses can’t wait to use the $20,000 tax write-off for business assets provided in this year’s budget, with 74.5% of those surveyed by SmartCompany saying they planning to claim under the write-off.
Who’s going to claim the $20,000 tax write-off
The SmartCompany poll of 58 readers revealed 1.8% have already bought something to claim, 29% are planning on buying something in the next month to claim, 14.5% are planning on buying something in the next three years to claim, 29.9% are planning to buy something in the next year to claim while 34.5% don’t intend to make any purchases to claim.
Of those planning to claim, one SME responded “any purchases [I] intend to make are ones I was making anyway and not because of the tax benefit”.
Mark Dakin, owner of the Melbourne Paella Company, told SmartCompany he has already talked to his accountant about upgrading one of his vehicles in the next month.
“It seems an amazing deal,” says Dakin who says he had no plans to make the purchase before the budget measure was announced.
“I think I’ll get in quick – because these governments change their tune and change the boundaries – and strike while the iron’s hot,” he says.
Of those not planning to make a purchase, one SME surveyed said “in our industry, many small businesses don’t have that amount of spare cash to throw around on something they weren’t already planning to purchase.”
But others would have claimed under the write-off if they were eligible.
“Not eligible, as apparently an organisation with 10 employees turning over more than $2 million is considered not to be ‘small’ – this is bullshit,” one reader said.
What you’re going to claim
While the asset write-off can be used for an unlimited number of items, most of those surveyed are not planning on making exorbitant claims.
Of those surveyed, 27.7% plan to spend under $5000 in total, 33% under $500, 22% under $20,000 and 16% under $40,000.
The item on most SMEs wish list to claim on the write-off is a new computer, with 75% of those surveyed saying this is what they plan to buy.
This was followed by a new vehicle for 35%, new tools for 24%, a new phone for 16%, new TV for 13% and a new tablet for 8%.
Your budget verdict
The $20,000 tax write-off was the most popular budget measure amongst those surveyed, followed by the 1.5% tax cut for those companies with under $2 million turnover and then the 5% tax discount for unincorporated businesses.
Other popular measures included $330 million for training programs to support young people to become job-ready and the multi-national anti-tax avoidance law.
Those surveyed were less impressed with the government’s voluntary corporate disclosure code for big business, with the majority rating this as the least important item in the budget for SMEs.
The majority of those surveyed rated the budget as a “good budget” overall (38.6%) while an overwhelming 67.24% said it was a “good budget for SMEs”.
“Great to see small business finally get some relief,” one reader said.
Others were less enthusiastic in their comments.
“While it appears a sweeter budget than the previous, I don’t think it is equitable or fiscally responsible,” one reader said.
“That small businesses are not comfortable boosting their spending by themselves shows that few have confidence in the ability of the current government to run the economy in a stable manner.”