Small businesses claim $418 million from $20,000 asset write-off scheme

More than 99,000 small businesses have made claims under the federal government’s $20,000 instant asset write-off scheme since July 1.

Part of the small business package included in this year’s federal budget, the tax break allows businesses with less than $2 million in annual turnover to immediately claim depreciation on asset purchases up to the value of $20,000, instead of writing off the asset over a number of years.

Read more: SME $20,000 “instant” asset tax write-off explained

Treasury data released by Small Business Minister Kelly O’Dwyer on Monday shows small businesses claimed a total of $418.5 million under the scheme between July 1 and December 15.

This compares to a total of $250 million claimed against the instant asset write-off scheme by 78,000 small businesses at the same time last year.

However, the latest data from Treasury represents only six months of claims and the full impact of the budget measure is therefore likely to be greater.

Approximately 56,000 claimants are new this year, with the average claim also increasing from $3211 last year to $4213 this year.

There has been an increase in the number of claims lodged by small businesses across all states and territories this year.

New South Wales tops the list for the state or territory with the most claims. Small businesses there lodged more than 28,000 claims worth more than $126 million.

Next in line is Queensland, with over 23,500 claims worth over $97 million, and Victoria, with just over 23,000 claims worth over $95 million.

The Northern Territory is the region with the lowest number of claims, with small businesses lodging 692 claims worth almost $3 million this year.

Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany this morning the uplift in small businesses taking advantage of the tax break is “a very good sign”.

“It was a big announcement on budget night and so I’m not surprised such a big number of people are accessing it,” he says.

Strong says he expects the “healthy” level of claims to continue as more small businesses finalise their tax affairs in the lead up to the end of the next financial year.