2024 Budget - $20,000 instant asset write off small business

The Government will extend the instant asset write-off concession for small businesses for another 12 months.

This will allow small businesses with turnovers capped at $10 million to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use for a taxable purpose between 1 July 2024 and 30 June 2025.

The deduction is available in the income year in which the taxpayer first uses the asset, or first installs it ready for use, for a taxable purpose. The deduction is known as the “instant asset write-off”.

Current status

In technicality, the increased instant asset write-off concession ceased on 30 June 2023. However, the Government announced last year in the 2023–2024 Federal Budget that it would be extended by one year, to finish on 30 June 2024.

That measure was contained in a Bill which is currently before Parliament (that is, it is not yet law). The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 was passed by the Senate on 27 March 2024 with one amendment relating to the instant asset write-off, which requires the approval of the House of Representatives.

The Senate amendment would:

• extend the coverage from small businesses to medium businesses, ie all entities with an aggregated turnover of less than $50 million; and

• increase the threshold from $20,000 to $30,000.

It is important to note that these proposed amendments have not been reflected in the 2024–2025 Budget announcement, which indicates that the Government will not be supporting them in the House of Representatives.

It is yet to be seen whether the Government will incorporate the 2024–2025 Budget announcement into the Small Business and Charities Bill 2023 or will reintroduce the measures for both years in a separate Bill.

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