Federal budget snapshot: a boost for small business
The Federal Government announced in its 2015 budget a $5.5 billion package to help more than two million small businesses. Here's what you need to know about the changes in depreciation rules.
What is it?
Before the announcement, business assets could be depreciated over a five year period. Now all small businesses are eligible for an immediate, 100 per cent tax deduction for any individual assets purchased that costs less than $20,000.
The tax deduction applies to each individual item purchased and there is no limit to how many items under $20,000 can be bought.
If you are registered business (you have an ABN) with an annual turnover of less than $2 million, you can claim the tax deduction.
What can be claimed?
Any item used for running the business. This includes vehicles, machinery, kitchen utilities, tables, chairs and carpets, office equipment such as computers, photocopiers and printers, hot water units, air-conditioning units and security systems.
You cannot claim expenses spent on stock for your business.
When does it start?
The tax deduction is effective from 12 May 2015 and will remain in place until the end of June 2017.
What is it's purpose?
The Government's aim is to give small business owners greater opportunity to invest into the growth of their business.
The Abbott Government said the package is also designed to encourage Australians who are considering opening a new business to take the step and go after their dream of being a small business owner.