2019 Federal Budget impact: small business owners win
Increased access to the instant asset write-off is a big win for small business this financial year.
The 2019 Federal Budget, announced earlier this month, could be the biggest and most important one we’ve seen in years. Why? Because it’s what’s known as an election budget, specifically designed to attract and retain votes in the upcoming election. What’s more, there are just 46 days between the budget being announced, on 2 April, and election day on 18 May. That’s the shortest gap in Australian history.
History lesson aside, exactly what changes have been made in an effort to secure the support of small business owners? Well, as you may have already heard, it’s good news for those who may be struggling to finance new tools, plant and equipment because the instant asset write-off is being expanded in two ways:
1) The ‘per asset threshold’ is increasing from $25,000 to $30,000. This means businesses can immediately claim a 100% tax write-off within the first 12 months of purchase.
2) The aggregated turnover threshold for a business to access the higher $30,000 threshold has also been increased – from a turnover of less than $10 million to less than $50 million. This means both small- and medium-sized businesses can benefit from the change.
What do you need to know?
This is a great tax break for small business owners – one that’s certainly worth taking advantage of if you’re in the market for new equipment. Whether it’s a coffee machine for the office or a $1000 generator, a $30,000 vehicle or a second-hand bobcat, all valid assets – purchased new or second-hand – will fall within the tax break as long as they don’t exceed the $30,000 threshold. The difference that additional $5000 can make, especially if you’re looking to invest in a new vehicle, is significant, and one that opens up a whole new range of options for those looking to purchase top of the line equipment.
To be eligible, remember to keep on top of your acquisition records throughout the year so you can easily prove you fall within the appropriate threshold. The change will apply from Budget night (2 April) until 30 June 2020 – so any assets you purchase need to be either used or installed ready for use within this timeframe. So mark your diaries, do your research, maintain solid records and reap the rewards from this year’s Budget update.