The permanent continuation of the $20,000 instant asset tax write-off scheme for businesses with up to $10million in annual revenue tops the Federal Budget wish list of Australia’s SMEs, according to research undertaken by MYOB.
Originally set to conclude after 30 June 2017, the scheme was extended until 30 June 2018 by the 2017/18 Federal Budget. It allows small businesses to immediately deduct assets costing less than $20,000, instead of claiming deductions over numerous years. It is on a per asset basis allowing multiple claims for assets costing less than $20,000 to be deducted.
The latest MYOB SME Snapshot – a survey of 297 small business owners from across Australia – found that:
- Almost half the respondents (47%) were not confident that the 2018 Federal Budget would deliver a positive outcome for SMEs, while only 16% were confident.
- When asked what measures they’d like to see in the Federal Budget, making the $20k instant tax write-off permanent was mentioned by 70% of respondents, followed by lowering the company tax rate (52%) and subsidies for businesses employing young Australians looking for work (42%).
- While over a quarter of respondents (26%) were not looking for any cashflow support from Government, almost half requested assistance with the instant tax write-off. Other support processes nominated by around a quarter of respondents included support for 30-day payment term guarantees, superannuation and subsidies come tax time.
- Forty percent of respondents found the administration of superannuation to be easier than it was previously, while only 12% found it harder. In addition, 11% of respondents did not pay superannuation.
- Almost half of SME owner operators plan to tune in to watch the Federal Budget live on budget night (45%).
Tim Reed, CEO of MYOB said the findings indicate that SME owners believe the greatest way the budget can assist them is through a reduction of the business tax burden, primarily by making permanent the $20,000 instant asset write-off but also through lower company tax rates.
“We have seen the popularity for the instant tax write-off in the past, and believe now is the time to draw a line in the sand and make it permanent”, he said.
“With small business owner confidence at a 3-year high as revealed by our research earlier in the year, it’s clear that we’re on track to create an environment where small businesses can truly succeed. Reducing uncertainty for SMEs in relation to the instant asset write-off is a simple yet effective measure to ensure their continued confidence.”
Reed said SMEs have made it clear that they are looking for the Budget to deliver tangible benefits, such as fixed cost reductions and investment in programs to drive growth and innovation.
He added, “All eyes will be on the outcomes – with 45% of SMEs surveyed expected to tune in to the live Federal Budget broadcast – so this presents a great opportunity for the Government to support small businesses and show their commitment to continuing to back the sector.”
Related: Most small businesses owners haven’t taken advantage of the $20k instant asset write-off, A permanent $20,000 instant asset tax write-off for businesses tops SME wishlist, MYOB finds, Federal Budget: small business $20k instant asset write-off scheme extended by one year and The $20,000 instant asset tax write-off has been used by 300,000 SMEs, says Federal Government.