Tax reprieve for small business


The Australian Taxation Office (ATO) has published guidance on the Government’s proposal to allow small business to immediately deduct each asset that costs less than $20,000.

Deputy Commissioner Steve Vesperman said while legislation to give effect to the proposal has not yet been enacted it will apply to all small businesses with a turnover of less than $2 million.

The legislation will backdate eligibility to 7:30pm AEST, 12 May 2015, so that assets acquired on or after on the Budget announcement will be eligible for the concession.

Small businesses taking advantage of the new measure will need to pool other assets valued at $20,000 or more and depreciate these assets at a rate 15 per cent in the first year and 30 per cent each year thereafter.

“It is also important that small businesses keep records of their purchases to claim their deduction,” Vesperman said.

“The ATO will be working with small businesses looking to use the immediate deduction to ensure they are appropriately claiming it. We will be monitoring claims of this nature and following up on high risk cases,” he said.

Small businesses can get the latest tax updates and information via the ATO’s new small business newsroom service. Subscribers to the service receive email updates on the latest news every three to four weeks.

Subscribers can also choose to stop receiving general tax information by mail and read it in the newsroom instead. Small businesses can check key dates and download them to their own calendars.

More than 45,000 small businesses have subscribed to the service which can be found at www.ato.gov.au/sbnews.