Last week the Government announced a proposal to increase the threshold for the instant asset write-off to $25,000.

“The $25,000 instant asset write-off will improve cash flow by bringing forward tax deductions, providing a boost to small business activity and encouraging more small businesses to reinvest in their operations and replace or upgrade their assets,” Mr Morrison’s office told Accountants Daily.

The write-off will be available for small business with an annual turnover of less than $10 million and will apply until 30 June 2020.

The government’s decision to raise the threshold comes after Labor announced that it would introduce the Australian Investment Guarantee, a permanent feature which will allow businesses to immediately deduct 20 per cent of any new eligible asset worth more than $20,000.  Labor has also pledged to introduce a dedicated small business minister in cabinet if it forms government.

At this stage, the proposed increase is not law.  We will keep you informed should the proposed legislation come into effect.

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