Tax write-off rule widened
Alan McKail is one of thousands of machinery dealers happy with the continued $20,000 tax write-off for small businesses announced in last week’s Federal Budget.
The National Farmers’ Federation spearheaded a successful campaign to retain the popular write-off, originally due to expire on June 30.
The WA Machinery Brokers general manager said the instant write-off opportunity for purch-ases up to $20,000 made “a huge difference for us, no doubt about it, last year was a great year”.
“This should certainly push our turnover up, no question about it,” he said.
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“For farmers to get all of their tax back straight away and buy multiple lots of $20,000 items was great to bring their income down a bit.”
The tax deduction, introduced in Joe Hockey’s 2015 Budget, allowed small businesses with an annual turnover up to $2 million to invest in items they might not otherwise be able to afford.
More farmers than ever will now be able to claim the write-offs because the “small business” umbrella was expanded from $2 million to $10 million.
NFF president Fiona Simpson welcomed the extension with a caveat, saying it should be a long-term arrangement.
“We put the case strongly for continuation of accelerated depreciation, with a community campaign generating hundreds of messages to the treasurer,” she said.
“Accelerated depreciation is helping our farmers invest for the future, and we’re thrilled the Government has sided with industry on this for another year.
“It is disappointing, however, that farmers do not have the certainty of a long-term asset write-off arrangement with the extension limited to a further 12 months.”
Mr McKail said it was a big confidence boost for those “not so small” businesses that now did comply for the write-off.
“It just means you’re not so hesitant to go out and upgrade those items,” he said. “It’s not only farmers affected, but the contractors that service those farms, and businesses like us too.”
Items farmers might purchase using the write-off included trailers, ploughs, bobcats and prime mover trailers, Mr McKail said.
WAFarmers president Tony York also welcomed the announcement, saying it was a great initiative for small and larger farmers.
“An increase from $2 million to a $10 million turnover cap is good news for small businesses,” he said. “(It’s) a benefit that will be attractive to many farmers, and one that the NFF and industry should be proud of having achieved.”
WA Small Business Commissioner David Eaton said small business owners across the State would be bolstered by the expanded limits.
“To date, it has assisted many business owners by allowing them to improve cash flow, upgrade assets and reinvest in their businesses,” he said.
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