In the recent Government announcements was a change in the low value asset write-off rules to enable businesses to claim an immediate deduction for low value assets below $5,000, BUT this applies from 01 April 2020.
There is a simple, but serious, flaw in this policy, it needs to apply from 01 January 2020 and here is why.
As a business owner I need to make decisions right now on business continuity planning, right now, not from 01 April 2020. The types of decisions I am making include:
Trades business – I’m going to split a four-person team into two teams of two with separation, requirement purchase/duplicate tools to kit out the second team
· Retail business – can I increase my business online, requirement spend on website expansion
Hairdressing business – can I split my hairdressing teams up and have them working from home taking direct appointments, requirement purchase chairs, mirrors, scissors
Restaurant business – create a home delivery service, split my restaurant into isolation zones, requirement extra home delivery bags, and containers, screens to divide segments of the restaurant
Accommodation provider – set up self-isolation rooms and practices for my guests, screens, changed laundry practices, changed food delivery practices
Office based business – team working from home, requirement computer screens, laptops, desks, chairs
All sectors, immediate investment in new technology to operate online, remotely
Every one of these decisions requires a business to spend $ right now on duplicating assets to enable their team to function in a COVID-19 world and to help achieve social distancing by splitting up teams or working from home.
If I spend that money before 31 March 2020 low value asset write off is only $500, spend that money after 31 March 2020 low value asset write off is $5,000.
COVID-19 did not happen on 31 March 2020, it’s happening right now. As a business owner and SME there is opportunity for innovation BUT we need the Govt Tax policy for Low Value Assets to be amended immediately to apply retrospectively from 01 January 2020 so we can put some Velocite into SME Business Continuity.
Share this message widely to all SME business owners, their friends and contacts who may find this useful.