Temporary extension of the instant asset write off

The Government has announced an additional temporary 12-month extension of the $20,000 instant asset write-off. Small businesses with aggregated annual turnover of less than $10 million will be able to immediately deduct the full cost of eligible assets costing less than $20,000, first used or installed ready for use between 1 July 2024 and 30 June 2025.

This measure is similar to the extension as announced in the 2023-24 Federal Budget, which temporarily increased the threshold to $20,000 for the year ending 30 June 2024.

BDO comment

Australian businesses require consistency and certainty to plan and invest in the future. BDO urges the Government to legislate a permanent increase in the instant asset write off threshold rather than this band-aid approach of ever-changing temporary threshold increases. BDO questions the restriction to small business entities and considers that all Base Rate Entities (i.e. entities with aggregated turnover of less than $50 million) should have access to the instant asset write off. It is time to legislate a permanent increase to the instant asset write off for all Australian businesses, with a practical and reasonable threshold.