Instant asset write-off extended to end of 2020
Business owners have six more months to take advantage of generous $150,000 tax incentiveAt a press conference in Canberra today, Treasurer Josh Frydenberg said the Instant asset write-off (IAWO) extension is anticipated to cost $300 million and will help about 3.5 million businesses.
The new Instant asset write-off program, unveiled on March 12 as part of the Morrison Government’s stimulus package, was scheduled to end on June 30, which a number of dealerships and machinery organisations have argued is way too soon.
Now business owners have until December 31, 2020 to take advantage of the generous tax incentive.
The announcement follows increased calls by a number of industry bodies including the MTAA (Motor Trades Association of Australia), ATA (Australian Trucking Association) and the TMA (Tractor and Machinery Association of Australia) for the Government to extend the IAWO dateline beyond June 30.
In March this year, the Government announced an overhaul of its Instant asset write-off program to increase eligibility and spending in an attempt to stimulate the economy as the COVID-19 pandemic firmed its grip on the country.
As part of the program, businesses can write off assets worth up to $150,000 on their tax return this year, a massive increase on the $30,000 prior to March 12.
Previously, only businesses with a turnover of less than $50 million are eligible, now the program is available to businesses with an annual revenue of less than $500 million.
Assets that are eligible for the write off could include a truck for a logistics company, a ute for a tradie, an excavator for a contractor, or a tractor for a farmer.
Multiple assets can be written off on the IAWO, as long as their costs do not exceed $150,000 each.
Assets purchased can be new or used, and must be installed ready for use by December 31, 2020.
“Hardworking Australian businesses can rest assured that the Morrison Government will do all that is necessary to support them to bounce back stronger and get to the other side of this crisis,” Frydenberg said.
While there has been no official figures yet from the Government on the uptake of the new IAWO, dealerships have reported a significant increase in enquiry and sales since the program's introduction in March and anticipate the extension to continue moving stock off the dealership floor.
According to TMA’s May 2020 sales figures, tractor sales have enjoyed a 30 per cent increase year on year and the market has recorded a third consecutive month of growth in tractor sales.
TMA’s executive director, Gary Northover, said the IAWO extension is “instrumental in supporting the general economic recovery.”
Peak industry employment body, Australian Industry (Ai) Group, also welcomed the Government’s announcement, saying the extension to the IAWO is a “sensible forward-looking measure”.
"Business investment has been inhibited in recent months both by the drain on cash inflows and the general level of uncertainty and the extension of this measure so that businesses have longer to put investment plans in place makes clear sense,” said Ai Group Chief Executive, Innes Willox.
"The write-off lift will give an immediate potential boost to business investment over next few months. It will particularly help businesses that had put investment plans on hold or that are looking to reposition in the wake of the COVID-19 crisis.”
RELATED READS:
10 tractors and machines for under $150k
10 earthmoving equipment for under $150k
Tags
Please see our Editorial Guidelines & Code of Ethics (including for more information about sponsored content and paid events). The information published on this website is of a general nature only and doesn’t consider your particular circumstances or needs.