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The bill to increase to the instant asset write-off threshold is still yet to pass Parliament, with only three months left till the bill ceases.
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Instant asset write-off measure still stalled in Parliament
02 April 2024
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****Correction**** This article incorrectly stated that the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 had been passed by Parliament. The bill is before Parliament, with amendments still yet to be passed by House of Representatives.
Parliament is still yet to pass the Support for Small Business and Charities Bill, which contains changes to the instant asset write off measure and other support measures.
Originally, this bill proposed that the bonus deduction would apply to the cost of eligible assets and improvements up to a maximum amount of $100,000, with the maximum bonus deduction being $20,000.
However, amendments made to the bill by Senator Jane Hume, will mean an increase in the threshold to $30,000, if passed by the lower house.
The amendments will also mean that a wider range of businesses can now access the measure. The instant asset write-off will apply to businesses generating less than $50 million. Originally the bill would have only applied to businesses with less than $10 million in turnover.
The bill also provides small and medium-sized businesses with a bonus tax deduction for FY23–24 relating to electrification and more efficient energy use.
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This will apply to businesses with an aggregated annual turnover of less than $50 million with a deduction equal to 20 per cent of the cost of eligible assets or improvements to existing assets that support electrification or more efficient energy use.
For many years, The Tax Institute has advocated for a permanent scheme to be introduced for small- to medium-sized businesses with an annual turnover of less than $50 million and for assets costing less than $50,000.
Non-arm’s length expense changes for super funds
The bill also introduces controversial non-arm’s length income measures, which will see APRA super funds exempted from non-arm’s length income (NALI), both in relation to general and specific expenses.
The NALI rules will still apply to SMSFs, with the bill introducing cap on the amount of income that will constitute NALI from a non-arm’s length scheme involving a lower or nil general fund expense.
The Institute of Finance Professionals Australia previously criticised the government for including the NALI measure in the same bill as the small-business support measures.
IFPA head of Tax Technical Neville Birthisel said it was unfortunate that contentious superannuation amendments were included in a bill that was otherwise designed to assist thousands of Australian small businesses.
Birthisel said the inclusion of the NALI measures had jeopardised the urgency of passing the essential measures for the small business, leaving the small-business community in the dark and uncertain on how to proceed.
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