What does it look like for small businesses under the new 2019-20 Federal Budget?

The Federal Government has handed down it’s 2019-20 Budget and there are some changes that may affect small businesses. We have done the heavy reading for you – here is everything you need to know under the new Federal Budget as an Australian small business owner.

Small businesses (with an aggregated annual turnover of less than $10 million) will be able to immediately deduct purchases of eligible assets costing less than $30,000 that are first used, or installed ready for use, from Budget night up until 30 June 2020.

As a result, assuming relevant legislation is enacted as proposed, the instant asset write-off threshold applicable to small business taxpayer in the 2019 income year is as follows:

• 1 July 2018 – 28 January 2019: less than $20,000
• 29 January 2019 – before 7:30pm (AEDT) on 2 April 2019: less than $25,000
• From 7:30pm (AEDT) on 2 April 2019 – 30 June 2019: less than $30,000

Small businesses can continue to place assets which cannot be immediately deducted under the instant asset write-off into the general small business pool and depreciate those assets at 15% in the first income year and 30% each income year thereafter. A low pool balance (i.e., the closing balance prior to current year depreciation deductions) can also be immediately deducted if it is less than the applicable instant asset write-off threshold at the end of the income year.

For the full report, please click here.