Any Small Business with a turnover of less than $2,000,000 can purchase assets up to the value of $20,000 and get an immediate tax deduction, rather than having to write them off through depreciation over the following years. This was announced in the Budget and is effective from 7:30pm on the 12th of May 2015.
Eligible assets include things like vehicles, sheds, storage containers, machinery, kitchens, furniture and fittings, plant and equipment (this is not an exhaustive list). It should be noted that the measure applies to BOTH new and second hand assets. It also applies on a per asset basis, so several assets each costing up to $20,000 will qualify for the write-off.
Only a small number of assets are not eligible (such as horticultural plants and in-house software). In most cases, specific depreciation rules apply to these assets.
Assets valued at $20,000 or more (which cannot be immediately deducted) may be able to be placed in the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.
If used wisely, the instant deduction can be a real benefit to small businesses. For further information contact Michael Spittles at Luka Group on 02 6883 2200 or .