Instant asset write-off scheme extended for six months

The instant asset write-off threshold was initially increased from $30,000 to $150,000 in March, with access expanded to include businesses with an aggregated annual turnover of less than $500m (up from $50m). Under the extended scheme, Australian businesses with annual turnover of less than $500 million will be able to take advantage of the prolonged timeframe to invest in assets to support their business as the economy reopens and Coronavirus health restrictions continue to be eased.

The measures are expected to support more than 3.5 million businesses. They are designed to support businesses in sticking with investments they had planned, and to encourage them to bring investment forward to support economic growth over the near term.

The instant asset write-off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided each costs less than $150,000.

The extension will also give businesses additional time to acquire and install assets, as they will now have until the end of the year. Assets can be new or second-hand and could include, for example, a truck for a delivery business or a tractor for a farming business.

Legislative changes will be made to give effect to this measure, which is estimated to have a cost to revenue of $300 million over the forward estimates period.