Some proposed depreciation changes for small business
The Assistant Treasurer has recently released a draft exposure on the website relating to the proposed changes to the depreciation rules for small businesses. If passed, these changes would come into force from 1 July 2012. In summary there are three key points to the changes.
· An instant write off for all assets costing less than $6,500.00 (up from the current $1,000.00)
· Allowing all small businesses to claim all assets in one combined pool at a depreciation rate of 30%
· Small businesses will be able to claim an instant write off of $5,000.00 when purchasing a new motor vehicle.
· In turn the small business entrepreneurs tax offset will be abolished, but the above changes more than compensate for this change.
Let's hope that these changes are passed by parliament to assist small business owners to invest in their businesses, and in turn boosting future productivity for the engine room of our economy in the years to come.