May 2013 – Small Business Consessions

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Small business concessions: changes to simpler depreciation rules apply from 2012-13.

With the end of financial year approaching, Stuart Conway from ARC Partners writes about Small Business depreciation for this financial year.

You could save tax by buying equipment before 30th June.

From the 2012 – 13 income year changes have been made to the rules for claiming depreciation for “small businesses”.

These changes mean that significant tax savings could be obtained if depreciating assets are purchased BEFORE 30th June 2013.

The amendments listed below only apply to you if you are a small business that has an aggregated turnover of less than $2 million. Your aggregated turnover includes the annual turnover of your small business and the annual turnovers of any connected or affiliated businesses.



Instant asset write-off

From the 2012-13 income year onwards, you can choose to use the capital allowance provisions in the Tax Act to immediately write-off (that is, claim a deduction for the full amount of) a depreciating asset that cost less than $6,500.

You can write the depreciating asset off at the end of the income year where you either:

  • start to use it for a taxable purpose
  • have it installed ready for use for a taxable purpose. 

Example: Claiming a deduction for an asset under the instant asset write-off threshold  

During the 2012-13 income year, Your Business buys a new computer from Mac Aid Pty Ltd for $3,000. As the computer is a depreciating asset and costs less than $6,500, Your Business can claim an immediate $3,000 deduction for the 2012-13 income year.


Accelerated deduction for motor vehicles

From the 2012-13 income year, you can choose to use the capital allowance provisions in the Tax Act to calculate the deduction for a motor vehicle costing $6,500 or more which you start to use, or have installed ready for use, for a taxable purpose. 

The cost of the motor vehicle is added to the general pool but unlike other assets, the deduction is $5,000 plus 15% of the remaining amount.

If the motor vehicle costs less than $6,500, it can be depreciated immediately, that is, the motor vehicle can be written off under the instant asset write-off rules




Want to know how these amendments will affect your business? Please do not hesitate to contact our friendly team at ARC Partners, Chartered Accountants.

Telephone: 03 9555 2221



Disclaimer: The advice provided in this article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.


If you would like to take advantage of these provisions and reduce this years tax, it’s important you get in touch with Mac Aid in time for delivery before the end of June.