2019 Federal Budget Changes

The Federal Budget has made changes to the instant asset write-off for small businesses. The new bill has been passed by parliament, but the changes will only come into play in the 2019 financial year once royal assent has been received.

Changes to the Federal Government Tax Break

  • The threshold for tax deduction for assets has been increased from $20,000 to $30,000.
  • Previously only small businesses qualified, but now medium-sized businesses will also be eligible for the instant asset write-off.
  • The annual business turnover which had to be less than $10 million has now been raised to $50 million.

What this means for businesses in the short term who purchase new or used assets (including motor vehicles) up to $30,000 before 30 June 2019, is they will see their taxable income reduced by $30,000. This will provide a significant reduction in their tax bill for the 2019 financial year.

There will be a three-tiered system to determine eligibility:

  • 1st Tier
    Threshold: $20,000
    Assets acquired prior to 29 January 2019 that are depreciable
  • 2nd Tier
    Threshold: $25,000
    Assets first used or installed between 29 January 2019 and 2 April 2019
  • 3rd Tier
    Threshold: $30,000
    Assets first used and installed after 2 April 2019 Federal budget announcement and prior to 1 July 2020

Amendments to the Luxury Car Tax (LCT)

Businesses that qualify as primary producers and tourism operators are currently eligible for a partial refund of the luxury car tax (LCT) on 4-wheel or all-wheel drive cars, up to a maximum of $3,000. The Government has also reformed these indirect taxes and grants available for any vehicles acquired on or after 1 July 2019.

In the 2019 financial year, they be able to apply for a refund of any LCT that they’ve paid for. The refund will be capped at $10,000. An additional $60 million will be contributed towards the Export Development Grant Scheme over the next 3 years.

Is your equipment in need of an upgrade?

If your business has an ABN we can help you secure these concessions through our low doc loan options. Low doc loans allow you to secure the funds you need without the need to provide financial statements. We can still offer you low interest rates as if the financials were supplied.

Let us help you organise the finance in time for you to claim the tax deductions, so that your cash flow is not compromised. Contact your Pacific Finance Australia Broker on 08 9213 4567 or send us an email via ebm@ebmfinance.com.au for more information.