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Need to make an asset purchase before 30th June?

With 30th June almost upon us, you’ve only got a few days to make up your mind on whether or not it’s worth making some last-minute purchases to grab a tax advantage with a handy write-off or write-down of assets in the 2013 financial year.

The Federal Government introduced some valuable amendments last year to the depreciation rules which give small businesses (annual turnover less than $2 million) some significant benefits, effective from this financial year (2012/13). Under these new rules, you can:

  • write off the full value of most depreciating assets costing less than $6,500 each (the limit used to be only $1,000 in prior financial years)
  • pool other depreciating assets in a ‘general small business pool’ and claim a 30% deduction for them
  • claim a deduction for most assets you have newly purchased or acquired, at 15% in the first year, regardless of when during that year you purchased or acquired them

Motor vehicles also get some handy concessional treatment (that includes cars, trucks, scooters, motorcycles, utes and vans, but not items such as tractors, harvesters, road rollers and graders, or trailers).

Small businesses can allocate a vehicle purchase to the small business pool and then also immediately write-off up to $5,000 for vehicles costing $6,500 or more, for the first year they start to use the vehicle. Along with the instant $5,000 write-off businesses can depreciate the remaining value of the vehicle through the general small business pool at 15% for the first year (i.e. $5,000 + 15% of the remaining balance as a deduction in the 2012/13 year) and 30% for the following years.

If you have any questions about eligibility or the benefits for your business, speak to Michelle Mulligan on 1300 622 422.

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