The government has introduced legislation to improve the instant asset write-off.

The instant asset write-off is set to increase from $20,000 to $25,000, while its termination date is set to be extended from 30 June 2019 to 30 June 2020.

The government introduced legislation into parliament yesterday to increase and extend the small business tax break, which is open to businesses with a turnover of less than $10 million.

Treasurer Josh Frydenberg said this would improve cash flow for small business owners, and encourage more small businesses to replace or upgrade their assets.

“Our government first introduced the $20,000 instant asset write-off in the 2015-16 budget,” he said.

“In the first year alone, more than 300,000 small businesses bought assets taking advantage of this initiative, according to the latest available data from the Australian Taxation Office – this equates to an average of around 800 businesses per day making a purchase with this initiative.”

The increase to $25,000 will be back-dated to 29 January, when the government announced its intention to raise the instant asset write-off threshold.