$20K ASSET WRITE OFF: A HUGE PLUS FOR SMALL BUSINESS
The Budget news of a $20,000 asset write-off for small business is an all round winner according to The Institute of Public Accountants (IPA).
“The increase in the accelerated depreciation write off threshold to $20,000 will be a great assistance to small business cash flow,” said IPA chief executive officer, Andrew Conway.
“This initiative is bringing forward the tax deduction that would have been deductible over a number of years.
“However, the IPA wants to paint a very clear picture of what it means as there appears to be some confusion in the market place.
“Simply put, if a small business makes a profit of $50,000, the tax payable at the new company tax rate would be $14,250. The deduction of business related assets up to $20,000 would reduce the taxable profit to $30,000 with a tax payable amount of $8,550; a tax saving of $5,700.
“For a non-incorporated small business the tax saving will be dependent on the individual’s marginal tax rate.
“This initiative will have major flow on effects for the broader economy. The retail sector should be very happy.
“More cash to invest in the economy makes this initiative a win-win-win proposition,” said Mr Conway.