The end of financial year is rapidly approaching. Keep in mind some rules have changed.
The end of financial year is rapidly approaching. For many businesses, this is a time to look at what spending is about to be done this year and what can be deferred till after July 1. Recent chages to the rules around what can be written off or depreciated might change your plans.
New rules recently announced have moved the goalposts. In the past, if you purchased an item for over $1000, you needed to depreciate its value over a number of years. As a result, you needed to maintain records of when you purchased an item and you could only deduct a portion of the value each year.
From July 1, Small Business Entities - businesses with an annual turnover of less than $2M - will be able to write off an asset purchase immediately with a cost less than $6,500 (read more about recently announced tax changes).
If your business needs a new computer, printer, cash register or other capital purchase that costs over $1,000 but less than $6,500 we'd suggest waiting for the financial year to roll over so that you can write-off the entire cost next year rather than depreciating the value of a longer period.
For items that cost less than $1000 or more than $6,500 - buy them when you please. The rules aren't really any different there. But for items between those values, holding off till the new year will give you a healthy write-off and a less complex tax return for 2012-13.
