The New Instant Asset Write-Off Changes for FY 2024: A Boost for Australian Small Businesses

As we step into the new financial year, small businesses across Australia are set to benefit from the latest changes to the instant asset write-off scheme. The Australian Government has announced significant adjustments to the scheme, which are crucial for small business owners to understand and leverage.

Proposed temporary increase to the instant asset write-off (June 2024)

“Under current law, the small business instant asset write-off threshold is (less than) $1,000 for the 2024 income year.

However, the Government announced in last year’s Budget that it would temporarily set the instant asset write-off threshold for small business entities at (less than) $20,000 for the 2024 income year, and it recently announced, as part of the 2024/25 Budget, that this temporary threshold would be extended to the 2025 income year.

If this measure becomes law, small businesses with an aggregated annual turnover of less than $10 million will generally be able to immediately deduct the full cost of eligible assets costing less than $20,00 that are first used or installed ready for use by 30 June 2025. The asset threshold applies on a ‘per asset’ basis, so small businesses can instantly write off multiple assets.

From 1 July 2025, the instant asset write-off threshold will revert back to (less than) $1,000.

Editor: The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 was first introduced in September 2023. It has not yet been passed, and the Senate recently attempted to amend it to increase the small business instant asset write-off threshold from $20,000 to $30,000, and expand the concession to include medium-sized businesses with an aggregated turnover of less than $50 million.

However, the House of Representatives has not accepted these amendments, and it is now not clear when (or if) this Bill will become law.

Ref: 2024/25 Federal Budget Paper No 2, 14 May 2024.

For more detailed information and to ensure you meet all eligibility criteria, visit the Australian Taxation Office website.

 


This blog post is intended to provide a general summary of the instant asset write-off changes for the 2024 FY in Australia for small businesses. It is not legal or financial advice. Please consult with a professional for advice specific to your business circumstances.

If you are interested in learning more about anything raised in this blog, contact us today. 

This is general information only and does not constitute advice. 

If you or someone you know would like more information or require advice about anything raised in this article, please contact us on email dmcnally@mcnallyaccountants.com.au

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