Instant asset write-off and simplified depreciation

May 27, 2014

From the 2012–13 income year small businesses have been able to write-off depreciating assets costing less than $6,500 in the income year in which they start to use the asset.

If the proposed 2013 Election changes are enacted, the threshold will change and only assets costing less than $1,000 (acquired after 31 December 2013) will be eligible for immediate write-off.

The bill (introduced in November 2013) has not yet been passed.  Uncertainty reigns, and accountants are unsure how to advise their clients. The suggestion by the ATO is that if the bill is still not passed by the time a tax return is lodged, we can write off the $6,500 (or less) asset. But if the bill passes after the return is lodged, we are to amend the return!!   This is absurd.  There could be a lot of work involved, particularly where financial statements are prepared.  Should the taxpayer (my client!) be penalised by paying further accounting fees, just because the Government cannot get their Act into gear in a timely fashion? (Pun intended)

Not happy!