The Government will temporarily increase the instant asset write-off threshold to $20,000, from 1 July 2023 until 30 June 2024.
Small businesses, with aggregated annual turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.
Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.
The provisions that prevent small businesses from re-entering the simplified depreciation regime for 5 years if they opt-out will continue to be suspended until 30 June 2024.
Australia’s tradies will lose the right to buy a $65,000 ute and claim it back on tax in one year – but they will now be able to spend $20,000 on tools and get generous treatment from the ATO.
The instant asset write-off program – formally known as ‘temporary full expensing’ will end on 30 June 2023.
Things you should know
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