Treasurer extends asset write-off by one year

SMALL businesses are being encouraged to keep spending after the government said it would extend the instant asset write-down for another year.

SMALL businesses are being encouraged to keep spending after the government said it will extend the instant asset write-down for another year.

This means that companies with annual turnover of up to $10 million a year can write off any approved asset they buy for their business up to the value of $20,000 until June 30, 2018.

The measure was first introduced in 2015 but will now be available to a further 90,000 businesses following the government’s decision earlier in the year to redefine small businesses as being those with turnover of up to $10 million a year, up from those with an annual turnover of $2 million.

The move, which was announced by Treasurer Scott Morrison in this year’s budget, has been welcomed by companies and industry bodies alike.

“Small businesses owners are out there fighting for growth in their businesses every day. They deserve our respect and support,” the Treasurer said.

Treasurer Scott Morrison delivering the 2017 Budget in Parliament House, Canberra. Picture: Kym Smith

“Backing up our recently legislated tax cuts, small businesses with a turnover up to $10 million will continue to be able to immediately write-off expenditure up to $20,000 for a further year.”

Last year the government dropped the company tax rate for small companies to 27.5 per cent — the lowest level in 50 years.

The popularity of the $20,000 tax concession saw almost 100,000 small businesses make claims in the first six months of its operation, according to Treasury data. Businesses claimed a total of $418.5 million between July 1 and December 15, 2015, compared with only $250 million for the same period the year before.

The Council of Small Business Australia, who called for the extension in its usual pre-budget submission to the Government, said providing additional cashflow to small business and opportunities for investment and innovation were important to stimulating economic activity and creating jobs.

Peak rural lobby group the National Farmers’ Federation also strongly supports the scheme which has allowed farmers to invest in items such as fencing, fodder storage upgrades, dams, water tanks, irrigation channels and windmills.

Fit For Business is a partnership between Leader Community News and Allianz