Increased asset and motor vehicle deductions for small business
The legislation increasing the immediate asset write off threshold for small business from $1,000 to $6,500 has recently passed both houses. It will come into effect from 1 July 2012 and will allow small businesses to write off depreciating assets costing less than $6,500 n the year in which they start using the asset or have it installed ready for use.
Additionally, small businesses will be able to claim a deduction for the first $5,000 of the cost of a motor vehicle purchased after 1 July 2012, with the remainder of the cost being allocated to a small business depreciation pool and depreciated at 15% in the first year and at 30% in the subsequent years.
The above measures are expected to result in increased cash flow and reduced compliance costs for small business. If you are considering investing in capital assets for your small business, it may be worthwhile to take into account the timing of the purchases to ensure that you are able to take advantage of the new, more generous provisions by making the acquisition on or after 1 July 2012.
