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Is $50 million the new $10 million for small business tax concessions?

Publication date: 04 Apr 19 | Source: THE TAX INSTITUTE

CANBERRA, 4 April 2019: This week’s Federal Budget raised the instant asset write-off threshold to $30,000 from Budget night and expanded the number of businesses who could access the write-off to businesses with turnover less than $50 million. This write-off will be accessible to eligible businesses until 30 June 2020. 

“The lifting of the threshold and extending the availability of the concession to many more businesses is most certainly a positive step. However, it does leave businesses in a situation where they will have to wrangle with three different thresholds in the 2019 income year if they want to actually claim the offset.”, said The Tax Institute’s Senior Tax Counsel, Professor Bob Deutsch. 

The thresholds will apply in the following way in the 2019 income year: 

  • $20,000 from 1 July 2018 to 28 January 2019 (for businesses with turnover less than $10 million);
  • $25,000 from 29 January 2019 to 2 April 2019 (7.29pm) (for businesses with turnover less than $10 million);
  • $30,000 from 2 April 2019 to 30 June 2019 (7.30pm) (for businesses with turnover less than $50 million). 

The highest the cost of the asset could be to take advantage of the offset threshold is $19,999.99, $24,999.99 and $29,999.99 respectively. 

“You really have to read the fine print. Such a simple concession so favourable to small business is unnecessarily complicated for the 2019 income year,” said Professor Deutsch. “If you don’t get the timing or the amount right, you could miss out.” 

With the offset set to end on 30 June 2020, Professor Bob Deutsch observed, “We wonder why this concession just doesn’t become a permanent feature of the tax system for small businesses”. 

Another magic number seems to be the $50 million turnover threshold. Not only can companies with less than $50 million apply the lower 25% company tax rate when it becomes available in 2021-22, they are now also able to claim the instant asset write-off concession. 

Professor Deutsch further observed, “Will $50 million become the new $10 million for small business tax concessions? $50 million could become the new magic number to define a small business for tax purposes.” 


For more information, please contact: Stephanie Conway, Media Relations: 02 8223 0011.


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