[vc_row][vc_column][vc_column_text]Is your business planning to purchase new assets? Perhaps new tools, a vehicle or computer upgrade? If so, you may be able to take advantage of the Coalition’s expanded “instant asset write-off”incentive or other key measures in this year’s federal budget.
Instant asset write-off expanded
This write-off is a tax relief measure running until 30 June 2020 that allows eligible businesses to claim an “instant”deduction (ie in the current year’s tax return) for certain asset purchases, rather than having to deduct this expenditure over time.[/vc_column_text][mk_blockquote font_family=”none”]For the first time, medium-sized businesses (with annual turnover below $50 million) now qualify for the write-off with effect from Budget night (2 April 2019). Previously, only businesses with turnover below $10 million were eligible.[/mk_blockquote][vc_column_text]The asset cost threshold has also increased from $25,000 to $30,000, meaning eligible businesses can now deduct depreciating assets costing up to $30,000 that are first used, or installed ready for use, from Budget night to 30 June 2020. The $30,000 threshold applies per asset, which means your business can instantly deduct multiple assets that each cost less than the threshold.
There have been several changes to the write-off in recent years. The following table summarises the thresholds that apply in different periods:[/vc_column_text][mk_table]
| Date asset first used, or installed ready for use | Threshold: small businesses (turnover <$10 million)* | Threshold: medium businesses (turnover≥ $10 million but <$50 million)** |
|---|---|---|
| 7.30pm AEST 12 May 2015 to 28 January 2019 | $20,000 | n/a |
| 29 January 2019 to 7.30pm AEST 2 April 2019 | $25,000 | n/a |
| 7.30pm AEST 2 April 2019 to 30 June 2020 | $30,000 | $30,000 |
[/mk_table][vc_column_text]* In all cases, small businesses must also have purchased the asset on or after 7.30pm AEST 12 May 2015.
** Medium-sized businesses must also have purchased the asset on or after 7.30pm AEST 2 April 2019.
Greater incentives to hire new apprentices
If you operate in a recognised industry, you may be eligible for increased incentive payments to take on new apprentices. This measure is designed to address skills shortages in trade occupations including: plumbers, hairdressers, bricklayers, bakers and pastry cooks, and wall and floor tilers.
From 2019–2020, employers hiring a new apprentice in an eligible occupation will receive an extra $4,000 incentive payment. This is in addition to the existing $4,000 incentive payment, bringing the total employer incentive to $8,000. The apprentice will also receive an extra incentive of $2,000.
Lower personal taxes to boost consumption
The Coalition’s personal income tax cuts are welcome news for businesses as greater take-home pay for taxpayers means more demand for goods and services. In the short term, Australians earning up to $126,000 per annum will receive an annual tax offset of up to $1,080 for the next four years. The maximum offset of $1,080 will be available to taxpayers with taxable incomes between $48,000 and $90,000. Then commencing in 2022–2023, the Coalition will roll out significant personal tax reform that, when complete, will see someone earning $200,000 save over $11,000 in tax.
Expert business advice
We’re here to help your business take advantage of these budget announcements. The instant asset write-off is only available until 30 June 2020, so talk to us today about planning for your new assets.[/vc_column_text][/vc_column][/vc_row]
