Instant Asset Write-Off For Australian Small Businesses Extended

(small.news) — The Australian Senate has passed legislation that will extend the $20,000 instant asset write-off for small businesses, according to Inside Small Business.

Despite it passing, the Chartered Accountants Australia and New Zealand (CA ANZ) is still calling for this write-off to be made permanent so that there can be less uncertainty and red tape.

Susan Franks, the tax and superannuation leader for CA ANZ, said, “This extension is a positive step, but the ongoing uncertainty around the instant asset write-off each financial year creates unnecessary uncertainty for small business owners.”

What Is The Instant Asset Write-Off?

The instant asset write-off lets small business owners with an annual turnover that is under $10 million to deduct purchases that are under $20,000. This way, the item’s value doesn’t have to depreciate over the years.

The main benefit of this write-off is the instant tax relief that is given, which can help a small business owner’s cash flow. For 10 years, this measure has typically been extended late into each financial year, according to Inside Small Business, which has created challenges for small businesses.

Even though this latest extension was passed earlier than other years, Franks argues that a more stable solution needs to be found.

Franks said, “We’ve advocated, for some time, for policymakers to make the instant asset write-off permanent and with the government looking for ways to reduce red tape in the tax system for business, this would be a simple way to achieve this goal.”