Following last week’s release of the federal Coalition budget (and surrounded by growing rumblings about the looming election) there has been a lot of chatter about how small business might benefit, or not, under the major parties in the coming term.
Disappointingly, there wasn’t a lot on offer for small business in last week’s Budget, and Bill Shorten’s reply didn’t add much hope either. One positive is it would be hard for them to ignore the business community’s dismay, and we can hope that the volume of critical responses might give small business more space on the agenda moving forward.
One great outcome for small business is the Coalition’s promise to extend the instant asset write-off scheme. Building on an announcement in January, the Coalition will now increase the threshold to $30,000 per asset (new or second-hand). Furthermore, the scheme will become available to businesses turning over up to $50 million in annual revenue. It is expected that this will make over 20,000 additional businesses eligible to take advantage of the instant asset write-off.
Speaking to SmartCompany, Jon Burrell, co-founder of Tentworld, summed up one main advantage of the scheme – it “will definitely speed up the ROI of any new capital purchases we make — making new capital purchases easier & more appealing to do,” he said. In other words, instead of outlaying funds and then writing off the depreciation over a number of years, business owners can benefit by reducing their taxable income in the same financial year.
As well as being a fantastic initiative that supports SMEs, one reason I keep banging on about the scheme is because research consistently shows that many business owners aren’t aware that they could be taking advantage of it. If you need a refresher, here’s an overview I wrote a couple of years ago that explains what it’s all about and what it can be used for.
If you’re ready to update assets for your business, give me a call on 0412 534 503 so we can talk about the best solution to meet your needs.