About 24 hours after the budget was announced, we saw the advertising campaigns start hitting the papers screaming out headlines like “20K tax break on forklifts!” “Buy now to claim the 20K tax write off!”. It was pretty obvious that this new budget was going to be big news for small business.
The ‘tax-break’ available to small businesses, refers to the government’s announcement that depreciable items acquired and installed ready for use between 12 May 2015 and 30 June 2017 will qualify for an immediate 100% deduction rather than being depreciated over a number of years. Provided that the asset costs less than $20,000 each excl GST.
Currently only assets that are less than $1,000 are eligible for immediate write-off, so lifting this threshold to $20,000 will make a huge difference to small business owners and hopefully boost the economy. This measure will have a significant affect on tax planning decisions for the current year.
There are two important things to consider when it comes to this announcement.
There are a number of other interesting measures announced as part of this year’s budget including a 5% discount for businesses not using a company structure, company tax rate reduced from 30% to 28.5%, and accelerated depreciation for farmers. Check out our fact sheet>