Small Business Concession Case Update

Instant asset write-off by 31 December 2013

John bought a commercial oven for $6,499.99 to go in his new cafe. He installed it on 31 December 2013, and use it solely for business purposes.

From 1 July- 31 December 2013, small business can claim an instant asset write-off for most assets that cost less the $6,500. the asset must be acquired and installed ready for use before 1 January 2014.

Because John bought and installed the oven before 1 January 2014, and because it cost less than $6,500, he can clam the instant asset write-off.

On or after 1 January 2014

John bought a computer for $3,000 on 31 December 2013, but installed it ready for use on 1 January 2014. It’s used for his business 100% of the time.

From 1 January 2014 onwards, small business can claim an instant asset write-off for most assets that cost less than $1,000.

Even thought John bought the computer on 31 December 2013, he only installed it ready for use on 1 January 2014. This means the lower instant asset write-off rules apply. Because the computer cost $1,000 or more, John can’t claim the instant asset write-off.

General Small Business Poll

By 31 December 2013

Helen operates her own Medical Centre. To entertain her clients, she buys and installs a new TV in the ceiling above the chair. The TV cost $6,500, and he installed it on 23 November 2013.

From 1 July- 31 December 2013, small businesses can claim an instant write-off for assets costing less than $6,500. Assets costing $6,500 or more should be depreciated through the general small business pool.

Helen must allocate the cost of the TV to the general small business pool. She can claim a deduction of 15% in the first year of owing this asset and 30% in following years.

On or after 1 January

In March 2014 Helen bought two new sets of tables and chairs, which cost $1,050 for each set.

From 1 January 2014 onwards, small business can only claim in instant write-off on assets costing less than $1,000. Assets costing $1,000 or more should be depreciated through the general small business pool.

Helen must allocate the cost of her new tables and chairs to the general small business pool. She can claim a deduction of 15% in the first year of owing the assets, and 30% of the remaining cost in following years.

 

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