2024/25 Federal Budget
Small business measures
Temporary increase to the instant asset write-off
Under current law, the small business instant asset write-off threshold is (less than) $1,000 for the 2025 income year.
However, the Government has announced that it will temporarily set the instant asset write-off threshold for small business entities at (less than) $20,000 for the 2025 income year.
Small businesses with an aggregated annual turnover of less than $10 million will generally be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2025. The asset threshold applies on a ‘per asset’ basis, so small businesses can instantly write off multiple assets.
Assets valued at $20,000 or more (i.e., which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.
The provisions that prevent small businesses from re-entering the simplified depreciation regime for five years if they opt-out will continue to be suspended until 30 June 2025.
From 1 July 2025, the instant asset write-off threshold will revert back to (less than) $1,000.
Retaining Business Activity Statement (‘BAS’) refunds
The Government will strengthen the ATO’s ability to combat fraud by extending the time the ATO has to notify a taxpayer if it intends to retain a BAS refund for further investigation. The ATO’s mandatory notification period for BAS refund retention will be increased from 14 days to 30 days to align with time limits for non-BAS refunds.
Legitimate refunds will be largely unaffected. Any legitimate refunds retained for over 14 days would result in the ATO paying interest to the taxpayer. The ATO will publish BAS processing times online.
This change will have effect from the start of the first income year after Royal Assent of the enabling legislation.
Relieving energy bill pressures
The Government is providing certain direct energy bill relief for small businesses. Of note, the Energy Bill Relief Fund is providing energy rebates to each of the approximately one million businesses on small customer electricity plans to help cover their electricity bills. This Budget will provide additional energy bill relief of $325 to eligible small businesses.
Expanding the Digital ID System
The Government is expanding the Digital ID System. The expanded system will lower the administrative burden on small businesses by reducing the amount of ID data they need to store and protect for their customers and their employees.
Building cyber resilience for small businesses
The Government is supporting small businesses to be secure online while they adopt and harness digital opportunities, including through funding the following:
- Cyber Wardens program to provide free, online training for small business owners and their staff to help drive cultural change and a cyber-safe mindset in Australian small businesses.
- Small Business Cyber Resilience Service to help small businesses build their cyber resilience and provide support when affected by a cyber incident.
- Cyber Health Check online interactive tool to enable small and medium businesses to self-assess their cyber security maturity.
The Government is also developing a ransomware playbook to provide guidance on how to prepare for, respond to and recover from, a ransomware or cyber extortion incident.
The Carrick Aland team are available to assist you to capitalise on any of the Budget measures or minimise your risk. As always, the detail is important so please let us know if we can assist.
Related reading
Source: NTAA
