The 2015 Australian federal budget highlighted new legislation for Growing Jobs and Small Business - expanding accelerated depreciation for small businesses.
What does this all mean? The Government has proposed to expand accelerated depreciation by allowing small businesses with aggregated annual turnover of less than $2 million to immediately deduct each asset that cost less than $20,000. The measure will apply to assets acquired from 7.30pm on 12 May 2015 until 30 June 2017. This will replace the previous instant asset write-off threshold of $1,000.*
Assets excluded from these depreciation rules include horticultural plants and in-house software allocated to a software development pool. In most cases specific depreciation rules apply to these excluded assets.
Assets that cost $20,000 or more (which can't be immediately deducted) can be deducted over time using a small business pool. Under the pooling mechanism a deduction for 15 per cent of the cost is allowed in the first income year with a 30 per cent deduction allowed for each income year thereafter.
This $20,000 limit applies to each individual item. Small businesses can apply this $20,000 rule to as many individual items as they wish. Read more here.
This is an excellent opportunity for small businesses to think ahead and make a smart purchase which can be beneficial to the business in the long term and written-off with the new legislation.
For example, updating costly equipment such as barriers and high speed or thermal doors will save the business significant maintenance and running costs further down the line. There are a number of assets which you could invest in, including:
- High Speed Rapid Doors: modern high speed rapid doors have been modified to run better, reduce wear and tear for the owner and perform better in the environment they are intended for. Movidor High Speed Doors for example, have been modified over time to reduce damage inflicted by forklifts and other vehicles by integrating a 'self-relocating' feature, which means that the curtain relocates back into its tracks if/when it is knocked out of place. High Speed Rapid Doors can be used in a number of environments from meat processing warehouses and cool rooms to manufacturing, distribution and postal distribution services. What will you save in the long run? Reduced energy costs from improved insulation and speed of the door / reduced call out costs to repair parts / reduced repair costs to the door itself and the door track / more efficient use of staff time with faster door operating speeds.
- Barriers (bollards and Tru-guard railing): bollards and guard rail prevent major damage to building and other costly equipment on site. It is far less costly to replace a bollard or piece of guard rail than it would be to repair a building or replace damaged equipment. Bollards provide a second layer of defence against damage to your assets. Flexible bollards are a new option whereby they flex on impact rather than causing damage to vehicles - read more about flexible bollards here.
- Air Curtains: create an invisible barrier to reduce temperature fluctuations and keep put pests and dust.
- Swing Doors: A light, swinging traffic door that swings quietly, safely and easily, regardless of the environment. No more heavy timber doors which can harbour bacteria and require re-painting down the line.
There is no better time to update your site to make use of the new legislation where you will also be saving ongoing costs for the business. *
Contact the Remax Team to request a consultation / site assessment or quote or to ask for more information about any of the products listed here or other products offered by Remax. Call today on 1800 010 221.
*DISCLAIMER: Information contained here is general in nature. We recommend readers to seek professional advice before making any decisions. For more information from the ATO, click here, or refer to your accountant.