Small Business Fact Sheet

If you own a business and have acquired plant and equipment, you may be aware that you can write the whole amount off depending on your turnover and the value of your purchase.

The rules and amounts vary so below we have summed up all the various timelines and values to make it simpler to see what you are entitled to.

But, as always, please confirm your eligibility with your accountant or a tax professional, before claiming these deductions.

Temporary Full Expensing

The ATO allows eligible businesses to claim an immediate deduction for the cost of an eligible asset in the income year that the asset was first held, first used, or installed ready for use for a taxable purpose.

Temporary Full Expensing

You can choose to use the simplified depreciation rules if you have a small business with an aggregated turnover (the total normal income of your business and that of any associated businesses) less than the relevant threshold.

Under these rules, you immediately write off (deduct their full cost in the year you buy them) most depreciating assets (eg. excluding buildings and capital works) that cost less than a certain amount each, that were bought and used, or installed ready for use, during the relevant time period.

Note: the instant asset write-off does not apply for assets you start to hold, and first use (or have installed ready for use) for a taxable purpose, from 7:30 pm (AEDT) on 6 October 2020 to 30 June 2023. If choosing to use the simplified depreciation rules then you must immediately deduct the business portion of the asset’s cost under temporary full expensing (see above).

Instant asset write-offs
small business entity write offs

How are items over the threshold treated?

You have an option of pooling most other depreciating assets that cost more than the threshold amount in a small business asset pool and claim:

For the 30 June 2021, 2022 and 2023 financial years, any remaining balance of the small business pool must be fully deducted at the end of the year.  In prior years, the balance is fully deducted when it falls below the relevant Immediate Write-off Threshold amounts set out above.

This information is accurate as of 01/01/2023. Please check current ATO legislation before relying on this interpretation of the legislation.

See “Interaction of Tax Depreciation Incentiveson the ATO website for further information and a summary of the interactions between the rules.