$20,000 Instant Asset Write-Off: Big News for Small Businesses

The Australian government has delivered a fantastic year-end surprise for small businesses. In May 2023, the federal budget announcement extended the small business instant asset write-off threshold to $20,000 for the 2023-2024 financial year. Recently, the Albanese government confirmed this extension, bringing significant benefits to small businesses.

Key Details You Need to Know:

AspectDetails
Effective DatesFrom July 1, 2023, until June 30, 2024
EligibilitySmall businesses with an aggregated turnover of less than $10 million
Per Asset Basis$20,000 threshold applies on a per-asset basis, allowing multiple write-offs
Prior DeductionsAdditional costs under $20,000 incurred between July 1, 2023, and June 30, 2024 can be deducted
Depreciation PoolAssets valued at $20,000 or more can be placed into a depreciation pool, depreciated at 15% in the first year and 30% each year after. Pool balances under $20,000 at the end of the 2023-24 income year can be written off

Why Is Small Business Instant Asset Write-off Important?

This measure significantly benefits small businesses. Allowing immediate deductions for a wide range of assets improves cash flow, reduces financial burdens, and lowers compliance costs. Consequently, businesses can upgrade equipment, invest in new technology, or improve operational efficiency without the strain of prolonged depreciation periods.

What’s the Big Deal?

On May 9, 2023, the Australian Government, through its 2023–24 Budget, announced a plan to boost cash flow and reduce compliance costs for small businesses by temporarily increasing the instant asset write-off threshold. The threshold rises from $1,000 to $20,000 for the 2023-24 and 2024-25 income years.

Last Updated: June 26, 2024

The policy update serves as a critical support mechanism for small businesses, enabling them to thrive and grow in a competitive market. For more detailed information, refer to The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, which outlines the specifics of the $20,000 instant asset write-off measure.

Wistax: Your Trusted Local Accountant in Northern Beaches

Amidst all these updates, if you’re wondering how your business can take full advantage of the instant asset write-off, Wistax is here to help. As your trusted local accountant in Northern Beaches, we dedicate ourselves to decoding these measures to ensure your business is eligible. Let us assist you in navigating these financial opportunities with ease and confidence.

Stay informed and take advantage of these updates to bolster your business’s health.

All WISTAX today for an initial free 15-minute telephone consultation with John and his team on 1800 841 312 if you want to join our fast growing accounting franchisee business