Budget 2023: Instant Asset write-off scheme extension

Firms with a turnover of less than $10 million a year can access the instant asset write-off threshold, which will temporarily rise to $20,000, giving small businesses further opportunities to invest in their operations and immediately deduct the full cost of depreciable expenses from their tax bill. There is no limit on how many assets can be bought.

This instant write-off will be available for assets first used, or installed and ready for use, between July 1, 2023, and June 30, 2024.

The measure will improve cash flow for small business while lowering the compliance and accounting costs of managing depreciation over several years, the budget papers state.

The $20,000 threshold will operate on a per-asset basis, the budget papers add, meaning “small businesses can instantly write off multiple assets.”

While the government has extended the instant asset write-off, it is a big reduction from the $150,000 asset value limit and $500 million turnover eligibility threshold for the instant asset write-off when COVID first struck in 2020-21.

This means it will be less about large equipment and more about smaller investments in electronics and small-scale machinery and tools.

The scheme replaces more generous COVID-era incentives which are due to expire on June 30, 2023.

Here to help

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Date published 10 May 2023