If you are a small business, did you know you will be able to claim an immediate deduction for assets less than $20,000 for another year?
Amendments to the Income Tax Act 1997 were introduced to Parliament in September, proposing an extension of the instant asset write-off initiative.
The proposed amendment will benefit up to four million small businesses with an annual turnover under $10 million, extending the eligibility for this scheme on a per-asset basis.
These deductions will apply to assets first utilised or installed and made ready for use between 1 July 2023 and 30 June 2024.
Assets valued at $20,000 or more, not qualifying for immediate deduction, will still have the option to be placed into the small business simplified depreciation pool. In this case, depreciation will occur at a rate of 15% in the first income year and 30% for each subsequent income year.
The instant asset write-off was introduced to incentivise small businesses to invest in capital resources, help cash flow and reduce compliance costs. Starting with a $1,000 deduction introduced by the Gillard government in 2012, this initiative has adapted to changing economic conditions, in addition to the Small Business Energy Incentive which was introduced to ease pressure on energy bills and help small businesses become more energy-efficient.
If you think your small business is eligible for the Instant asset right off, contact Walker Hill today! support@walkerhill.com.au.
