SYDNEY, May 17, 2017
The Federal Government’s decision to extend the accelerated depreciation rule is a victory for small business that will encourage investment and job creation, said Cameron Poolman, CEO of online small business lender OnDeck Australia.
Australian small businesses with a turnover of up to $10 million will be able to immediately write off expenditure up to $20,000 for a further year to June 30, 2018. Previously, the rule – which was due to expire on June 30, 2017 – was available to small businesses with turnover of less than $2 million.
The scheme is designed to improve cash flow, help small businesses reinvest in their business, as well as replace or upgrade their assets.
According to Treasury data released by former small business minister Kelly O’Dwyer in December 2015, more than 99,000 small businesses made claims worth $418.5 million under the write-off scheme in its first six months of operation between July and December 2015, indicating the scheme’s popularity among small business owners.
“Small businesses will benefit as a reduction in their tax liability will allow them to focus on business growth and expansion. This is a real benefit for small business and we feel if used effectively it could help plug the gaps in investments and tax management,” said Mr Poolman.
The accelerated depreciation process allows small business to acquire assets for up to $20,000 and benefit from a tax benefit immediately. The only problem is that sometimes, small businesses do not have the cash to fund new acquisition.
Even if small businesses are short on cash to fund new expenditure, they can borrow to invest in their business and save up to $6,000 in tax.
Mr Poolman is available to comment on this significant development and how Australian small business stands to benefit.