A couple of changes have been introduced by the government effective 1 July 2012 and would affect the income years 2012/13 onwards. These changes only apply to you if you are a small business that has an aggregated turnover of less than $2 million. If you retail fuel, your non-fuel sales should be less than $2 million per year.
- Increase in instant asset write off. You can now claim an immediate deduction (write-off) for most depreciating assets purchased that cost less than $6,500. Previously you could write-off an asset costing less than $1,000.
- Accelerated deduction for motor vehicles. If you buy a motor vehicle for use in your business, you can now claim an immediate $5,000 deduction. The remainder of the cost goes to a depreciation pool to be depreciated at 15% for the first year and 30% for later years.
Some businesses have interpreted this to be an additional deduction to the already existing depreciating rules, that is surely NOT the case. You still get the same deductions over time, the newer rules are simply making more deductions to be claimed sooner.
BY SURESH RAJANI
Suresh Rajani is
the Business Leader at TAX FIRST (NSW) & TAX FIRST (SA) - accounting and business advisory firms located in Sydney and Adelaide.
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