A renewal of the $20,000 instant asset write-off for the 2024/2025 financial year has yet to be confirmed, leaving small-business owners in an uncertain position once again.
For the last nine years, the tax break has allowed small-business owners to write off up to $20,000 worth of assets when lodging their tax returns.
However, the $20,000 cut-off has never has never been legislated permanently. Instead, successive governments have renewed the measure on a yearly basis.
This year, the $20,000 write-off was part of an amendment bill that the House of Representatives did not vote on before adjourning last week, leaving its fate up in the air for the time being.
When will we know?
We may not know the fate of the policy until late March at the earliest. According to the House of Representatives parliamentary sittings calendar, published last October, the next sitting is scheduled for March 25.
According to the same calendar, the Treasurer will also hand down the budget on this day. The $20,000 instant asset write-off has been announced in the budget in previous years – including last year – so it’s likely that the same could happen again this year.
Will the election interfere with the instant asset write-off?
This is also uncertain.
The Federal Budget has been moved forward this year from May, most likely due to the impending election deadline. If the write-off is announced in the budget on the current date of March 25th, then the election won’t interfere with the measure.
However, if the Prime Minister calls the election sooner, the write-off’s fate may be uncertain for a while longer. The ABC reported that several Labour MPs were dropping hints in Parliament that its most recent fortnight of sittings, in February, could be the last before the election.
Small-business owners call for more clarity on tax breaks
Despite the $20,000 instant asset write-off’s long history, no Government has made the measure permanent, which has frustrated many small-business owners.
After all, it’s difficult to invest in your business if you don’t know whether you can write off those investments, or when the write-off is announced so last-minute before the end of the financial year.
“We need to see [the instant asset write-off] supported as soon as it is announced, not last minute before the end of the tax year, as it was last financial year,” said Rachel Power, who runs a small cafe in rural Tasmania.
The Council of Small Business Organisations Australia (COSBOA) recently urged the Government to make the instant asset write-off permanent and raise the threshold to $150,000.
“This would allow small businesses to invest in technological advancements that increase productivity,” said the peak body in its pre-budget submission.
This article was first published on sibling website Inside Small Business.
