Small businesses that are suffering after the economic slowdown following the Global Financial Crisis and declining demand will benefit from a range of measures in the budget designed to stimulate investment spending.
The changes directly impacting small businesses from 1 July 2012 relate to previously enacted or announced measures. These include:
Allowing small businesses to write off depreciating assets costing less than $6,500
The introduction of simplified pooling rules for depreciating assets costing $6,500 or more, and
- Immediate deductions of up to $5,000 for the cost of a motor vehicle (even if the cost exceeds $6,500).
The Government believes these measures will free up cash flow and encourage businesses to invest. The reforms will undoubtedly bring welcome tax relief, and reduce compliance costs to some small business taxpayers. However many will be unable to access them because they will fall outside of the operative $2 million “turnover test” which taxpayers must satisfy in order to qualify as a “small business”.
To fully understand these write-off rules and how you can save tax, talk to your Oculus accountant.