Businesses in the local channel planning to make use of the federal government’s expanded instant asset write-off assistance during the ongoing pandemic are in for some good news, with the initiative being extended to the end of the year.
The government earlier this year pledged $700 million to increase the instant asset write-off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million until 30 June 2020 — up from the previous turnover cap of $50 million.
Now, the government has said it is extending the $150,000 instant asset write-off for six months to 31 December 2020. It is estimated the measures will provide some level of assistance to roughly 3.5 million businesses.
“Australian businesses with annual turnover of less than $500 million will be able to take advantage of this extended time frame to invest in assets to support their business as the economy reopens and coronavirus health restrictions continue to be eased,” federal Minister for Employment, Skills, Small and Family Business Michaelia Cash said in a statement.
“These measures will support over 3.5 million businesses. They are designed to support business sticking with investment they had planned, and encouraging them to bring investment forward to support economic growth over the near term.
“The instant asset write-off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided each costs less than $150,000,” she added.
It is anticipated that the extension will also give businesses additional time to acquire and instal assets, as they will now have until the end of the year. Assets can be new or second-hand.
The government said that legislative changes will be made to give effect to the new measure.
The federal government said in March it would pump $17.6 billion into a number of initiatives aimed at helping to keep the economy afloat in the face of the disruptions caused by COVID-19.