What Is

What is the ATO's 'Immediate Deductibility for Assets Less than $20,000' scheme, and how does it work?

Small businesses with an aggregated annual turnover of less than $2 million will now be eligible to receive an immediate tax deduction on each asset they purchase costing less than $20,000. Assets can be new or old but must be acquired between 7:30pm (AEST) 12 May 2015 and 30 June 2017.

This is an expansion of the previous deduction threshold of $1,000.

What can I claim under this measure?

Cars, vans, utes, trailers, motorbikes, lawnmowers, ovens, fridges, coffee machines, other machinery, kitchens, tables and chairs, carpets, printers, photocopiers, tools, welding equipment, saws, generators, pumps, solar panels, heating, hot water units, water tanks, air conditioning units, sound and security systems, computers—any item used for running the business—will be 100 per cent tax deductible.

What can't I claim under this measure?

Purchases including horticultural plants and capital works are not eligible as they are subject to their own depreciation rules.

What if my asset is over $20,000?

Assets valued at $20,000 or more (which can't be immediately deducted) can be placed in the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

This measure commenced 7:30pm (AEST) 12 May 2015 and will cease on 30 June 2017. For more information please visit the ATO website.

The government has announced in the 2016-17 Budget that as of July 1, 2016, small businesses with an aggregated turnover of less than $10 million will now be able to access the simplified depreciation rules including the instant asset write-off scheme.