The Government has extended the $20,000 immediate write-off for small businesses to 30 June 2019.
All entities carrying on a business with an aggregated turnover of less than $25 million are eligible for this small business concession.
Small business entities can also apply the simplified depreciation rules, which include:
- Depreciating assets valued at less than $20,000 (GST exclusive) will be immediately deductible
- Depreciating assets valued at more than $20,000 will be depreciated in one pool at a rate of 15% in the first year and 30% in future years
- If the pool balance at the end of the year is less than $20,000 before applying any other depreciation deduction, the entire pool balance can be written off.
- Sale proceeds from the disposal of an asset that has been written off under these rules must be included as assessable income.
Entities that do not qualify for this concession will need to depreciate all purchased assets valued over $300 (GST exclusive). Immediate deductions are only available for assets costing $300 or less.
Now is an important time to consider purchasing assets that are required or due to be replaced in the near future.
Take advantage of these concessions before the end of financial year to minimise your business tax in 2018.
Remember that the asset must be purchased, installed and ready for use before 30 June to be claimed in that tax year.