Half of SMEs that know about the newly enlarged $150,000 instant asset write-off plan to leverage it.
- 35% of Australian SMEs have not heard of the instant asset write-off
- 46% of SMEs that are aware of the write-off are likely to take advantage of the increased limit of $150,000
- One in two (46%) of SMEs that intend to use the instant asset write-off will invest in IT equipment, a further 46% would invest in a vehicle
- 41% of SMEs would need a business loan to access the instant asset tax write-off
Sydney (27 May 2020): Research by leading online SME lender OnDeck Australia, has confirmed that over one-third of the nation’s small and medium enterprises (SMEs) could be missing out on the tax savings of newly enlarged instant asset write-off, simply because they are unaware of it.
On 12 March 2020 the Morrison Government raised the limit of the instant asset write-off from $30,000 to $150,000, and expanded eligibility to include businesses with annual turnover below $500 million, up from $50 million previously, until 30 June 2020[1].
However, OnDeck’s study found 35% of SMEs say they are not familiar with the instant asset write-off.
Mr Oliver Wade, Head of Marketing & Partnerships, OnDeck Australia, said, “This write-off is available to 3.5 million Australian businesses. So it is a concern that over one million enterprises could miss out on the opportunity to save on tax today while investing for tomorrow’s growth, because they are unaware of the write-off.”
Close to half (46%) of SMEs that are aware of the instant asset write-off say they are likely to take advantage of it. Close to half these SMEs (46%) plan to use the tax break to invest in IT equipment, vehicles[2] (46%), manufacturing equipment and machinery (19%) and office furniture (15%).
Finance is required to access the asset write-off
Two out of five (41%) SMEs say an online small business loan would be helpful to take advantage of the instant asset write-off.
Mr Wade said, “Preserving cashflow is always a priority for the SME community, so it makes sense for small businesses to use loan finance to fund business assets.
“However, time is of the essence. In order to claim the newly enlarged instant asset write-off, the asset needs to be in place and ready to use by 30 June 2020[3]. This makes it important for SMEs to contact their broker for help arranging finance to take advantage of the $150,000 instant asset write off, which is slated to reduce back to $30,000 from 1 July 2020.
“OnDeck’s research confirms that among SMEs that have successfully applied for bank finance in the past, one in four have been negatively impacted by the time taken to secure finance. As a fintech lender, OnDeck has a fast application process – much of which can be completed online, often with funds available in as little as one working day,” concluded Mr Wade.
About OnDeck
OnDeck (NYSE: ONDK) is the proven leader in transparent and responsible online lending to small business. Founded in 2006, the company pioneered the use of data analytics and digital technology to make real-time lending decisions and deliver capital rapidly to small businesses online. Today, OnDeck offers a wide range of term loans and lines of credit customized for the needs of small business owners. OnDeck has provided over $13 billion in loans to over 110,000 customers in 700 different industries across the United States, Canada and Australia. In Australia, OnDeck is backed by leading accounting software provider MYOB and has a 5-star rating from Trust Pilot. For more information, visit www.ondeck.com.au
About the research
The independent research was conducted online in April 2020 by Honeycomb Strategy across more than 300 SME owners Australia-wide. The survey included SMEs with less than 50 employees, annual turnover of $50,000-$5 million, and in operation for at least 12 months.
About OnDeck’s COVID-19 Resource Hub
OnDeck’s COVID-19 Resource Hub provides SMEs with details about government stimulus packages, practical tips on managing a small business through uncertain times, case studies of inventive SMEs pivoting their expertise to survive the pandemic and recommended reading from trusted sources. To find out more visit www.ondeck.com.au/covid-19/
###
Media Contacts:
Anthony O’Brien
Corpwrite Australia
+61 (0) 411 578 818
[1] https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Support_for_business_investment.pdf
[2] The Australian Taxation Office has indicated that the instant asset write-off for passenger cars is limited to the business portion of the car limit of $57,581 for the 2019–20 income tax year. The excess cost of the car cannot be claimed under any other depreciation rules. https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/
[3] https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/
