Small business owners could be able to afford a broader range of vehicles thanks to an instant asset write-off change, should the Opposition be elected in 2025.
The Opposition is calling for the threshold to be increased to $30,000.
At present, Australian businesses earning under $10 million annually can receive an immediate deduction on assets including vehicles worth up to $20,000, rather than spread the depreciation across multiple years.
While this rules out almost all new vehicles on sale, it can be applied to used vehicles.
Vehicles which cost more than $20,000 can also still be claimed, though only across a three-year period rather than one.
100s of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now.
The threshold rose to as much as $150,000 for utes and vans – or $60,000 for passenger cars – at the height of the COVID-19 pandemic in 2020/21, though this was scaled back to $20,000 as of July 2023.
The most recent proposal to increase the $20,000 threshold to $30,000 went back and forth between the House of Representatives and the Senate for nine months, eventually resulting in no change for the current financial year in late June.
Financial publication Accountants Daily reports Sussan Ley, shadow treasurer and deputy leader of the opposition, has again proposed to increase the instant asset write-off threshold to $30,000 if her party wins power in next year’s election.
“The Coalition will end the uncertainty and the annual stand off by making the instant asset write-off permanent and lifting the threshold to $30,000,” Ms Ley said, as reported by Accountants Daily.
This proposal has been backed by CPA Australia, one of Australia’s largest accounting bodies.
“We believe this measure will provide small businesses with much-needed certainty to plan for the future,” CPA tax lead Jenny Wong told Accountants Daily.
“The delay in passing the bill has already caused small businesses to lose out on opportunities for the 2024 financial year.
“We support the increase to the threshold to $30,000 and making the instant asset write-off permanent.”
“Time sensitive measures that benefit taxpayers should be progressed through parliament with greater urgency. Failure to do so damages business trust and confidence in government.”
Disclaimer: The information on this website is for general purposes only and not a substitute for professional financial advice. CarExpert recommends seeking independent legal, financial, taxation or other advice unique to your individual circumstances.
MORE: All you need to know about the instant asset write-off scheme in 2024
