Powered by MOMENTUM MEDIA
Receive the latest mybusiness newssign up
$30k asset write-off, tax cuts unveiled in federal budget

$30k asset write-off, tax cuts unveiled in federal budget

Australian Parliament House

More businesses will be eligible for an instant asset write-off on purchases valued at up to $30,000 under the federal budget, which will also see substantial tax cuts introduced.

Originally expanded as a temporary measure for purchases under $20,000 in value, and increased to $25,000 by the government earlier this year, Treasurer Josh Frydenberg said that the measure would be further extended and expanded.

The new threshold will be $30,000, he said, and businesses will be able to use the upfront deduction on all asset purchases up to this value.

Advertisement
Advertisement

Mr Frydenberg said that this would support cafes to buy a new fridge or grill, a plumber to buy more tools or a courier to purchase a new vehicle and claim an upfront deduction.

In addition, eligibility requirements would be changed to businesses with annual turnover of up to $50 million. That, Mr Frydenberg said, would enable an additional 220,000 businesses to access the write-off, taking the total number of businesses eligible to claim the upfront deduction to 3.4 million.

Citing the importance of small business to the nation’s economy, and that business owners “start early, they finish late [and] they pay workers first, then their own wages”, Mr Frydenberg also reiterated the government’s previous plans to cut the tax rate for SMEs to 25 per cent, which the government would seek to fast-track further.

Personal taxes to fall

Personal income tax cuts, flagged in leaked memos ahead of the budget, will also be introduced.

SPONSORED CONTENT

 

As part of what he called “the largest personal income tax cuts since the Howard Government”, Mr Frydenberg announced plans to cut personal income taxes for all individuals earning up to $126,000 each year.

The cuts, he said, would be worth up to $1,080 for individuals or $2,160 per year in tax relief for dual-income households per year.

Importantly, these cuts would be made applicable to the current tax year, with monies available once taxpayers lodge their annual tax return after 1 July 2019.

Furthermore, the government has proposed systemic changes to tax rates, to come into effect in 2024–25.

Under the changes, the 37 per cent tax rate, which as of 2017–18 covered annual earnings of between $87,001 and $180,000, would be scrapped entirely, and the 32.5 per cent tax rate (covering annual earnings of $37,001 to $87,000) would be cut to 30 per cent.

The lowest tax band, charged at 19 per cent on earnings of $18,201 to $37,000, would be expanded to earnings of up to $45,000, while the highest tax band would be expanded to incomes over $200,000, up from those over $180,000.

That would mean that all taxpayers on salaries of between $45,001 and $200,000 would pay tax at the lower rate of 30 per cent.

“We want Australians to earn more and to keep more of what they earn,” Mr Frydenberg said.

My Business will have the full breakdown of what’s on offer for SMEs tomorrow morning (Wednesday, 3 April), followed by a special coverage of industry reaction and analysis of what it actually means for businesses, employers and entrepreneurs.

comments
FROM THE WEB
$30k asset write-off, tax cuts unveiled in federal budget
mybusiness logo