The Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, is urging Federal Parliament to reassure small-business owners that they will confirm two tax breaks that they announced in last year’s budget.
“Time is running out with just six weeks until the end of the financial year for small business to claim these deductions, but they still don’t know if they’re allowed to make the claims,” Billson said. “We’re hearing from confused small businesses who just want certainty. I encourage the Parliament to act swiftly to guarantee these small business tax incentives.”
The two tax breaks involved are the instant asset write-off and a tax incentive for businesses that introduce energy efficiency upgrades.
The proposed legislation will offer an instant asset write-off of $20,000 for businesses with a turnover of up to $10 million, allowing them to deduct up to that amount for eligible assets between 1 July 2023 and 30 June 2024. Until the measure passes into law small businesses can only write-off $1000 for eligible assets, and then have to apply general depreciation rules.
The small business energy incentive worth up to $20,000, proposed in April 2023 ahead of the budget, will, if confirmed, offer an additional 20 per cent depreciation for eligible assets that promote electrification and more efficient use of energy by small businesses. This measure was mooted to be made available to SMEs with an annual turnover of less than $50 million, and is designed to help them save on energy bills by spending money on electrifying their heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.
“The scheme requires eligible assets or upgrades to be first used or installed ready for use between 1 July 2023 and 30 June 2024, but with the legislation still not passed time is fast running out for small businesses to meet that deadline,” Billson said.
“This uncertainty has highlighted the need for predictability and certainty so a small business can plan in a sure-footed way for important investments that uplift the capacity, the productivity and drive innovation in their business,” the Ombudsman added. “Right now, we need to be energising enterprise. We need to be giving more encouragement for people to turn an idea into an investment and to make that big decision to turn scarce resources into new capability, new equipment, new technology to help with the success of that enterprise and the livelihoods that depend upon it.
“Having that encouragement to invest in new kit, new plant and equipment, new technology is really an important signal, but what’s needed is the certainty that these tax breaks are real,” Billson concluded.
The Ombudsman urged small-business owners to seek advice on these issues from their accountant, bookkeeper, tax agent or trusted adviser and refer to ato.gov.au for more information.
