# Tax write-offs for business



## Jack Malarkey (Jan 11, 2016)

*2020-21 Budget announcement by the Treasurer*

Building on the successful expansion of the instant asset write-off in our response to COVID-19, we will now allow 99 per cent of businesses to write off the full value of assets they purchase.

Businesses with a turnover of up to $5 billion will be able to immediately deduct the full cost of eligible depreciable assets acquired from 7:30pm (AEDT) on 6 October 2020 and first used or installed by 30 June 2022.

https://ministers.treasury.gov.au/m...lief-back-hard-working-australians-and-create
*Budget measure description (with emphasis added):*

JobMaker Plan - temporary full expensing to support investment and jobs

Receipts ($m)

202021202122202223202324Australian Taxation Office1,500.011,400.018,100.04,300.0

The Government will support businesses with aggregated annual turnover of less than $5 billion by enabling them to deduct the full cost of eligible capital assets acquired from 7:30pm AEDT on 6 October 2020 (Budget night) and first used or installed by 30 June 2022. It will improve cash flow for qualifying businesses that purchase eligible assets and bring forward new investment to support the economic recovery.

Full expensing in the year of first use will apply to new depreciable assets and the cost of improvements to existing eligible assets. *For small and medium sized businesses (with aggregated annual turnover of less than $50 million), full expensing also applies to secondhand assets.*

Businesses with aggregated annual turnover between $50 million and $500 million can still deduct the full cost of eligible secondhand assets costing less than $150,000 that are purchased by 31 December 2020 under the enhanced instant asset writeoff. Businesses that hold assets eligible for the enhanced $150,000 instant asset writeoff will have an extra six months, until 30 June 2021, to first use or install those assets.

Small businesses (with aggregated annual turnover of less than $10 million) can deduct the balance of their simplified depreciation pool at the end of the income year while full expensing applies. The provisions which prevent small businesses from reentering the simplified depreciation regime for five years if they optout will continue to be suspended.

This measure is estimated to decrease receipts by $26.7 billion over the forward estimates period and $3.2 billion over the mediumterm. The receipts impact is reduced over the mediumterm as this measure brings forward deductions that would have been made in future years.

https://budget.gov.au/2020-21/content/bp2/download/bp2_01_receipt.docx


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## Jack Malarkey (Jan 11, 2016)

Budget overview by government relations firm, Barton Deakin:

https://bartondeakin.com/app/uploads/2020/10/Budget-Brief-2020-21.pdf


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