Businesses with a turnover of less than $10m have until 30 June 2017 to immediately claim the cost of depreciating assets that cost less than $20,000.
This is a relatively generous (but temporary) concession, when compared to the reduction of the threshold back to $1,000 to come 1 July 2017. This will be the case unless the government decides to extend this measure in the upcoming May Federal Budget, but no such indication has been given so far.
The immediate deduction is available where the depreciating asset was acquired on or after 7.30 pm on 12 May 2015 and is first used or installed ready for use between 7.30 pm on 12 May 2015 and 30 June 2017.
Further, the group of entities that will have access to this immediate deduction has expanded because the turnover threshold to access this concession has increased from $2m to $10m. Specifically, with effect from 1 July 2016, an entity will be a “small business entity” if it:
- carries on a business, and
- satisfies the $10m aggregated turnover test
Bringing forward one’s plans to invest in more business assets to before 30 June 2017 enables access to these immediate deductions for costs which can potentially reduce tax liabilities.
More information on the specific conditions to satisfy the new $10m threshold is available on CCH iKnow.
 Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 has been passed by the Senate with amendments and awaiting agreement by the House of Representatives but the government has indicated it will agree to these amendments, meaning the measure is most likely to be enacted.