Thursday 24th January 2013

Look to take advantage of tax changes in 2012/13

  • Tax Changes

If you're a small business owner (turnover less than 2 million) you are able to take advantage of the new changes in the small business depreciation rules effective from the 1st July 2012. The legislation involves three key changes.

  • A $6,500 instant write-off threshold now applies. Prior to 1st July 2012 the allowable limit was $1,000. Allowable items include photocopiers, laptops, fridges and other small business related plant and equipment.
  • Assets above the $6,500 threshold are depreciatied in the small business pool at a rate of 15 percent in the first year and 30 percent thereafter regardless of it's effective life. Prior to 1st July 2012 assets costing more than $1,000 or more were allocated to long life small business pool (2.5% first year, 5% depreciation rate afterwards) or the general small business pool (15% first year, 30% subsequent years) depending on the effective life of the asset.
  • Motor vehicle immediate write-off becomes $5,000 for motor vehicles acquired during 2012/13 year. In addition to this you can place the newly purchased motor vehicle in the general small business pool (15% in the first year and 30% in years after) regardless of the assets effective life.

These changes effectively simplify existing small business depreciation rules and can lead to increased tax deductions.

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