While the May 2018 Budget extended the $20,000 immediate write off for small business for an additional year, there may still be benefit in bringing purchases forward and claiming the deduction in the current financial year.

Currently, small businesses with aggregated turnover of less than $10 million are entitled to claim an immediate deduction for depreciable assets costing less than $20,000 (less than $22,000 GST inclusive if registered for GST).

However, the threshold for the immediate deduction is scheduled to reduce to $1,000 ($1,100 GST inclusive) from 1 July 2018.

Purchase review

Small businesses should review their planned purchases of depreciable assets and consider bringing the purchase of any items costing less than $20,000 forward where possible in order to claim the 100 percent deduction in the year ended 30 June 2018.

Any assets costing more than the immediate write-off threshold must be added to the general small business depreciation pool and depreciated at 15 percent in the year of purchase and 30 percent in subsequent years. Any assets which have not been pooled in previous years must also be added to the pool, and will be depreciated at 30 percent.