A staggering number of business owners are missing out on a common tax incentive, despite pushing for it to be made available to them.
Some 85 per cent of SME owners surveyed in a joint study by H&R Block and Officeworks have never used the $20,000 instant asset write-off. That equates to a potential collective loss of around $2.4 billion.
The surprising lack of uptake is even more astounding given that 96 per cent of business leaders want the scheme to continue longer than the current timeframe to 30 June 2019.
A big part of the problem, it appears, is that many business leaders are unaware of the tax break — just 40 per cent admitted knowing about the measure. Others claimed that confusion about how to claim the instant deduction, or a lack of relevance to their business, were behind them not taking it up.
Sadly some business owners claimed to be too busy to make their claim.
Not taking up the claim could be having serious impacts on the wider economy. Almost two-thirds (59 per cent) of leaders surveyed would reinvest the money into their business if it were available, while 35 per cent said they would increase their salaries.
Business leaders also feel strongly about the future of the tax break, which was introduced as a temporary measure to stimulate activity and has since been extended several times. The original threshold was just $1,000.
Around half of business leaders think the $20,000 limit should be increased to $30,000, while four in 10 want to see it doubled to $40,000 to deliver meaningful support for their business.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.