Tax Alert - Bill for Instant Asset Write-Off for $20,000 and Small Business Energy Benefits finally passes

Lowe Lippmann Chartered Accountants

The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 was finally passed by Parliament yesterday, with two key concessions, including:

  • The instant asset write-off threshold is $20,000, for assets first used or installed ready for use between 1 July 2023 and 30 June 2024.
  • The Small Business Energy Benefits bonus 20% deduction for eligible expenditure that supports electrification or more efficient energy use, incurred between 1 July 2023 and 30 June 2024.


Now that the Bill has been passed by both the House of Representatives and the Senate, it now simply waits to receive Royal assent.


Instant asset write-off threshold is $20,000


The instant asset write-off (IAWO) threshold is $20,000, for assets first used or installed ready for use between 1 July 2023 and 30 June 2024. This is down from the $30,000 threshold which was being debated in Parliament for the last three months.

 

It is important to note that the IAWO threshold of $20,000 applies only to small business entities (with aggregated turnover of less than $10 million).

 

There was a prolonged debate to include medium sized entities (with aggregated turnover of less than $50 million) ultimately not being agreed to or adopted.


Small Business Energy Benefits bonus 20% deduction

 

The Bill also included the Small Business Energy Benefits, which provide a bonus 20% deduction for eligible expenditure that supports electrification or more efficient energy use, incurred between 1 July 2023 and 30 June 2024. We note that this bonus 20% deduction is available for both small and medium businesses (with an aggregated annual turnover of less than $50 million).

 

Eligible depreciating assets (and improvements to depreciating assets) that support electrification or more efficient energy use will need to be first used or installed ready for use (or the improvement cost incurred) between 1 July 2023 and 30 June 2024.

 

Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business. If the asset has a private use component, then a proportionate adjustment will need to be applied to claim the bonus 20% deduction.

 

Full details of this bonus 20% deduction has been explained in a previous Tax Alert – click here.



Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

Liability limited by a scheme approved under Professional Standards Legislation


July 1, 2025
Large proprietary limited – are you one? Tips and traps for your assessment. In Australia, being classified as a large proprietary limited company means that you have to prepare, and lodge audited financial statements with ASIC under the Corporations Act 2001 (the Act), however many companies are not necessarily applying the thresholds appropriately. A proprietary company is large if it meets at least 2 of the following thresholds: Consolidated revenue ≥ $50 million Consolidated gross assets ≥ $25 million 100 or more employees. These thresholds seem simple, however some points to note: The calculations must be performed applying ALL accounting standards so even if you are preparing special purpose financial statements, then you will need to assess these thresholds as if you were applying all standards, including: AASB 16 Leases – this standard would add a right of use asset to your balance sheet potentially significantly increasing your gross assets. AASB 10 Consolidated Financial Statements – if you have controlled entities then the inclusion of their income statement and balance sheet may significantly increase each of the thresholds. AASB 128 Investments in Associates and Joint Ventures / AASB 11 Joint Arrangements – if you have entities over which you have significant influence or joint control then applying equity accounting or including your share of assets and revenue would affect the thresholds. In determining the number of employees, the Act is clear that it is all full-time and part-time employees (on a pro-rata basis), however casual employees need to be considered. For example, are they genuinely casual with varying hours / shifts each week or are they in substance a permanent member of your team but just employed on a casual basis.  The thresholds need to be met at the end of the financial year and therefore entities should track their performance during the year so they are aware if they will meet the definition of a large proprietary company at year end.
June 17, 2025
In a previous blog, we discussed the changes to the accounting standards relating to classification of current / non-current liabilities on the balance sheet. We have been receiving a number of questions on this topic and have provided some practical scenarios below as well as some actions for you as we approach 30 June reporting dates.
June 13, 2025
High Court special leave application granted to appeal Bendel Case decision The Australian Taxation Office has been granted special leave to appeal to the High Court from the Full Federal Court decision in FCT v Bendel [2025] FCAFC 15. During March 2025 we released a Tax Alert ( see here ) explaining the current view of the ATO following the Full Federal Court decision that an unpaid present entitlement (or UPE) owed by a discretionary trust to a corporate beneficiary is not a “loan” for Division 7A purposes. The ATO also issued an Interim Decision Impact Statement ( see here ) in response to the Full Federal Court decision, providing information for taxpayers and advisers in relation to the details of the case and issues decided by the court.
More Posts