Australian small businesses can benefit significantly from two recent government initiatives designed to stimulate investment and reduce tax burdens. The $20,000 instant asset write-off and the small business energy incentive offer substantial opportunities for businesses to enhance their operations and improve their financial health.

$20,000 instant asset write-off 

Small businesses with an aggregated annual turnover of less than $10 million may be able to deduct the full cost of eligible new and second-hand assets which cost less than $20,000, under the instant asset write-off (IAWO).

Eligible assets must be first used or installed ready for use between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so you can instantly write off multiple assets.

The usual rules for claiming deductions still apply. You can only claim the business portion of the expense and make sure you have records to prove it.

For more information visit, ato.gov.au/instantassetwriteoff

The small business energy incentive 

Businesses with an aggregated annual turnover of less than $50 million can now get an additional 20% tax deduction for spending that supports more efficient energy use. This measure is called the Small business energy incentive.

Between 1 July 2023 and 30 June 2024 (i.e. the ‘bonus period’), eligible assets must be both:

• first used or installed ready for use for any purpose, and
• used or installed ready for use for a taxable purpose.

Eligible improvements must also be incurred during the bonus period. Up to $100,000 of expenditure can be claimed, with a maximum bonus deduction of $20,000 per business.

For more information, visit ato.gov.au/energyincentive