$20k accelerated deductions for small business extended another year

The ability for small business entities to claim an immediate deduction for assets costing less than $20,000 has been extended for another 12 months until 30 June 2019 (includes second hand goods).

From 1 July 2019, the immediate deduction threshold will reduce back to $1,000.

There are no limits to the number of times you can use the immediate deduction assuming your cashflow supports the purchases.

Registered for GST:

The cost of the asset needs to be less than $20,000 after the GST credits subtracted.

Not Registered for GST:

The cost of the assets needs to be less than $20,000, inclusive of GST.

Assets that don’t qualify include:

  • Horticultural plants
  • Capital works (building construction costs etc.)
  • Assets leased to another party on a depreciating asset lease

If you purchase assets costing $20,000 or more, the immediate deduction does not apply but small businesses have the ability to allocate the purchase to a pool and depreciate the pool at a rate of 15% in the first year and 30% for each year thereafter.