Federal Government To Deliver New Financial Support for Small Businesses

The Federal Government introduced the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 into Parliament this week.

This Bill intends to deliver on the measures promised to small business owners in the 2022-23 Budget, and are designed to ease the financial pressure on small businesses.

Business Foundations has compiled an overview of the key provisions in this Bill that will directly impact small businesses this financial year.

Instant Asset Write Off

Schedule 1 of the Bill will allow small businesses to take advantage of the $20,000 instant asset write-off from the 1^st of July 2023 to the 30^th of June 2024.

This measure allows small businesses with a turnover of less than $10 million to deduct the complete cost of eligible assets that were used for business purposes worth up to $20,000, that were installed or delivered before the 30^th of June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets. This measure will help businesses improve their cash flow, save on tax, and reduce compliance costs.

It is important to note that some types of assets do not qualify for this scheme, including capital works, horticultural plants, and intangible assets. It is wise to speak with your account to determine whether your asset will qualify before you purchase.

Small Business Energy Incentive

Schedule 2 of the Bill will also introduce the Small Business Energy Incentive, another measure announced in the 2023-24 Budget designed to help small and medium-sized business electrify and ease pressure on their energy bills.

This allows businesses with an annual turnover of less than $50 million to claim a 20% tax deduction on their shift towards the electrification and energy efficiency of their business. Eligible expenses can include adopting electrified heating and cooling, energy-efficient appliances, induction cooktops, battery installations, and heat pumps.

The maximum claim allowed is $20,000, meaning that businesses can potentially receive tax benefits on up to $100,000 of eligible expenditures made between the 1^st of July 2023 and the 30^th of June 2024.

The measures included in the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 may provide financial relief to small businesses and allow them to save on their tax bill. It is important to note that whilst these tax benefits may seem attractive, you should always consult with your accountant to confirm your eligibility and determine whether new purchases are right for your business.