Bill extending instant asset write-off passes Parliament
Parliament has swiftly passed the Treasury Laws Amendments (Increasing and Extending the Instant Asset Write-Off) Bill 2019 just two days after it was announced.
The bill was passed by the Senate and the House of Representatives on Thursday morning with 18 government amendments, paving the way for the implementation of what has been referred to as the big budget win for small business.
The bill gives affect to the government's announcement that it will lift the instant asset write-off cap to $30,000 and extend it out until 30 June 2020.
Under the new legislation, medium-sized businesses with an annual turnover of less than $50 million have also been added to the scheme, reportedly covering an additional 22,000 businesses employing 1.7 million Australians.
The bill does not become law until it receives royal assent.
Once it does, it will mean that accountants and their clients will have to work with three different thresholds in the 2019 income year. This is because the government first lifted the instant asset write-off from $20,000 to $25,000 from 29 January 2019, before increasing it further to $30,000 for assets first used and installed after the 2 April budget announcement and before 1 July 2020.
The Institute of Public Accountants welcomed the increase in the instant asset write-off earlier this week, but said it is disappointed that, in leaving the deadline at 30 June 2020, the government has ignored calls for the scheme to be made permanent.
“The increase in the instant asset write-off from $20,000 to $30,000 along with the increase in the turnover threshold from $10 million to $50 million is welcomed but we believe this should be a permanent fixture of the tax system and not just an extension through to 2020,” IPA chief executive Andrew Conway said.
“Every year this initiative, a signature policy recommendation of the IPA, is a dangling carrot come the federal budget. It needs to be permanent to give small business certainty in making reinvestment in their business decisions.”