Instant Asset Write-Off Threshold Boosted to $20,000: What Small Businesses Need to Know

In a recent announcement by the Australian Government on 9 May 2023, there's promising news for small businesses. As part of the 2023–24 Budget, the instant asset write-off threshold will see a temporary increase. Here are the key takeaways:

• Duration of the Increase: The raised threshold will be in place from 1 July 2023 to 30 June 2024.

• The New Threshold: Businesses can now benefit from an increased instant asset write-off threshold of $20,000.

• Who's Eligible? This change targets small businesses with an aggregated turnover of less than $10 million. If you have eligible assets costing less than $20,000 that are first used or installed and ready for use within the specified date range, you can immediately deduct their full cost.

• Claiming Multiple Assets: The beauty of the $20,000 threshold is that it applies per asset. This means businesses can instantly write off several assets.

• For Assets Above the Threshold: If you have assets valued at $20,000 or more, they won't qualify for immediate deduction. However, they can be added to the small business simplified depreciation pool. These assets will then be depreciated at 15% in their first income year and 30% in the following years.

While this measure has been announced, it's crucial to note that it hasn't been made law yet. We'll be sure to keep our clients updated on any further developments.

Navigating the financial landscape can be challenging, but you don't have to do it alone. At GMB Partners, we're committed to helping businesses thrive. If you have questions or need expert advice on leveraging this new change, get in touch with GMB Partners. Our team is here to guide you every step of the way.