Are you aware of the new ATO rules for business asset deductions, motor vehicle accelerated deductions, and simplified pooling that are current in the 2012-2013 income year?
1. Higher Asset write-off Threshold – $6500
Most depreciating assets up to $6500 can be FULLY claimed as an expense deduction against income (write-off), which is up from the $1000. The Australian Tax Office (ATO) gives an example – A camera is purchased $5900 and a high resolution printer $4,500. Both are fully deductible as expense in 2012-2013, used entirely for the business, as they come under the $6500 threshold.
2. Accelerated deduction for Motor Vehicles
Purchase a motor vehicle for the business (or the proportion for business use) and claim an immediate $5000 deduction. The remainder of the cost can be claimed through the General Small Business Pool at 15% for the first year, then 30% for later years. An ATO example is purchasing a ute $37,080, used 50% for business. The calculation for depreciation in 2012-2013 is $5000 + 15% x ((50% x $37,080) – $5000) = $7,031. Note the first $5000 is also immediately claimable as well as the $7031.
3. Simplified asset pooling
Assets over $6500 can be pooled under simplified depreciation rules and deducted at a single rate 30% each year, except for newly acquired assets – they are deducted at 15% (half the pool rate) in the first year. The former Long Life Pool (no longer exists) is rolled over as the opening balance of the general pool for 2012-2013 and depreciated at 30% instead of the former 5%.
Interestingly, the ATO site at Simplified Depreciation Rules is still dated 28 June 2012 and has the old $1000 threshold, but the new ATO site advertised on the bulletin that came with the latest BAS statements – has the latest new rules.
Tell us which will apply to your business and whether you can see a benefit for your business – comment now.