Key Highlights

• Extended Asset Write-Off: Small businesses can deduct up to $20,000 instantly until June 2025, enhancing cash flow.
• Energy Incentive: Businesses can claim a 20% tax deduction (up to $20,000) for energy-efficient upgrades, supporting sustainability.
  

New Benefits for Small Business Owners

Instant Asset Write-Off Extension

On 14 May 2024, the government announced in the 2024–25 Budget that the $20,000 instant asset write-off will be extended until 30 June 2025. This extension aims to improve cash flow and reduce compliance costs for small businesses with a turnover under $10 million. Here’s what you need to know:

• Higher Threshold: The instant asset write-off threshold has been increased from $1,000 to $20,000 for the 2023-24 and 2024-25 income years.
• Immediate Tax Benefit: You can deduct the full cost of eligible assets under $20,000 in the same financial year they’re first used or installed. This means more money in your pocket sooner.
• Per Asset Basis: You can claim this deduction for multiple assets, as long as each costs less than $20,000.

This could simplify and reduce the cost of investing in necessary equipment, promoting growth and efficiency.

Small Business Energy Incentive

In addition to the instant asset write-off, the Small Business Energy Incentive offers further benefits for energy-efficient investments:

• Bonus Tax Deduction: Businesses with turnover under $50 million can claim a 20% bonus tax deduction (up to $20,000) for investing in energy-saving upgrades.
• Examples: Upgrades can include efficient heating and cooling systems, better fridges, or technologies like batteries and heat pumps.

These initiatives not only cut costs but also support environmental sustainability.

How to Leverage these Initiatives

Understand the Eligibility Requirements

• Instant Asset Write-Off: Ensure your business turnover is under $10 million. Purchase assets under $20,000 and use or install them by 30 June 2025.
• Small Business Energy Incentive: Your business turnover should be under $50 million to qualify for a 20% bonus tax deduction on energy-saving investments.

Identify Necessary Investments

• Assess your business needs to identify assets or energy-saving upgrades that can enhance efficiency. Consider equipment like efficient heating and cooling systems or other energy-efficient technologies.

Plan Your Purchases

• Create a timeline for purchasing and installing assets. Ensure they’re ready for use within the eligibility periods specified for each initiative.