June 4, 2024 4:33 PM

a boost for small business: the 2024 federal budget's instant asset write-off update

The 2024 Federal Budget has brought with it a boost for small businesses across Australia, with the Federal government announcing an extension to the instant asset write-off threshold.

In a move to support cash flow and reduce compliance costs, the instant asset write-off threshold, which was previously set to revert to $1,000, has been increased to $20,000. This extension is applicable for the income years 2023–24 and 2024–25, providing small businesses with a much-needed financial cushion.

what does this mean for small businesses?

Small businesses with an aggregated turnover of less than $10 million can immediately deduct the full cost of eligible assets costing less than $20,000. This threshold applies on a per-asset basis, allowing multiple assets to be written off instantly. This extension is expected to improve cash flow for small businesses, enabling them to invest in necessary equipment and assets to drive growth. The ability to write off multiple assets provides flexibility and encourages business investment.

For assets valued at $20,000 or more, businesses can continue to place them into the small business simplified depreciation pool.

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what assets are eligible?

The program applies to all types of assets used for business purposes, including:

  • Machinery and equipment
  • Tools
  • Fixtures and fittings
  • IT hardware – computers, laptops, printers, etc.
  • Office and shop furniture
  • Motor vehicles
  • Business signage
  • Air conditioners.

There are some exceptions, so be sure to check out the ATO website before purchasing any assets

how can moneytech help?

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With the instant asset write-off extension, now is the time to consider your options. If you are looking at expanding your business or upgrading equipment, Moneytech's Equipment Finance or Business Loans are two solutions that can help businesses get the finance you need to take full advantage of the instant asset write-off in 2024.

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This article is for information purposes only and does not constitute financial advice. You should speak to a qualified financial professional about your unique situation before making decisions about financial products.

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The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 containing this measure for the 2023–24 income year is currently before Parliament. The government's commitment to this extension reflects its ongoing support for small businesses.

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