Wine businesses stand to benefit after expansion of instant asset write-off

Building on the successful expansion of the instant asset write-off in the Federal Government’s response to COVID-19, the Treasurer Josh Frydenberg announced that 99 percent of businesses will be allowed to write off the full value of assets they purchase.

Businesses with a turnover of up to $5 billion have been able to deduct the full cost of eligible depreciable assets acquired from 7:30pm (AEDT) on 6 October 2020 and first used or installed by 30 June 2022.

Treasurer Frydenberg said the move will unlock investment, expand the productive capacity of the nation and create tens of thousands of jobs.

Small businesses will buy, sell, deliver, install, and service these purchases.

To complement this full expensing, the Government will also temporarily allow companies with a turnover of up to $5 billion to offset tax losses against previous profits on which tax has been paid.

The Treasurer said this will provide a targeted cash flow boost that businesses across the country desperately needed.

Normally, businesses would have to return to profit before they can use their losses, however, these are not normal times, he said.

Losses incurred to June 2022 can be offset against prior profits made in or after the 2018-19 financial year.

Treasurer Frydenberg said that in order to keep their workers, these businesses needed immediate help.

In addition, the Government is also providing $105 million in tax relief to expand access to a range of small business tax concessions by lifting the aggregated annual turnover threshold for these concessions.

Businesses with an aggregated annual turnover between $10 million and $50 million will, for the first time, be able to access up to ten small business tax concessions.

The expanded concessions will apply in three phases, with the first phase starting from 1 July 2020. The changes will reduce red tape and support around 20,000 businesses to attract workers and retain jobs.

The Treasuer said tax relief for hard-working Australians and businesses is part of the Government’s Economic Recovery Plan to “create jobs, rebuild the economy and secure Australia’s future”.

Following the unprecedented investment incentives announced in the 2020 Federal budget, it was reported by the ABC that a spike in machinery sales was expected across Australian industries.

It was reported that dealers were preparing for increased interest in new machinery, with one tractor dealer in Victoria saying the tax changes would ‘spark enthusiasm from producers to complete the purchases they may have been thinking about’.

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