News
Digital boost for small businesses
The $1.2 billion expansion to the Government’s digital strategy is set to make it easier for small businesses and startups to depreciate intangible assets such as software, designs and intellectual property.
In a move that acknowledges the importance of tech and tech investment in the post-COVID-19 economy, a suite of measures have been announced, which include changes to the way Australian businesses can claim depreciation of intangible assets like intellectual property and in-house software.
There will also be $100 million for digital upskilling, $124 million for investment in AI adoption, tax offsets for the gaming industry and funding to expand the Government’s digital small business advisory service.
Perhaps the most key change, is the tax offset allowances for intangible assets, something which small businesses and tech communities have been requesting for some time, dating back to when the Government introduced the $20,000 instant-asset write-off scheme back in 2015. The scheme allows for depreciation of assets like work vans and cafe kitchens, or anything used by a business for income-generating purposes.
Up to now, it has always excluded intangible assets such as software licences — things which are becoming increasingly important, not only for tech companies, but for all businesses, particularly during the coronavirus pandemic.
This is a measure that it likely to be welcomed by the startup community, often with very few ‘tangible’ assets to their name.
Prime minister, Scott Morrison, said: “Every business in Australia is now a digital business. The tradesman or woman who seeks work through AirTasker. The landscaper who finds most of their new business through search engine placement and social media. The farmer who keeps track of their herd with electronic tags or drones. The local Thai restaurant that sells through UberEats, MenuLog, Deliveroo, or any one of half a dozen different food apps. The gym where members book their classes through an app…We must keep our foot on the digital accelerator to secure our economic recovery from Covid-19."
For further information on intangible assets under the new strategy – contact your local TaxAssist Accountants for advice and guidance.
Date published 12 May 2021 | Last updated 13 May 2021
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