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Hopefully making small business accounting easy

As part of the most recent budget package, the Government announced on 2nd May 2011 that the depreciation rules would be further simplified and also accelerated to assist small business.

The proposed legislation would allow small businesses, defined as businesses with annual turnover under $2 million, to obtain an immediate write off of all assets purchased for less than $5,000.00. If the asset in question is used partly for business and partly for private use, then you would need to ensure that the business proportion of the assets cost did not exceed $5,000.00. The deduction can only be claimed in the year that the asset is installed or can be said to be ready for use in the business.

The second step, that results in a simplification of the depreciation regime, is that most , if not all, assets would be able to be pooled together and all assets then claimed at a standard 30% depreciation rate.

The only downside with these measures is that they are not scheduled to commence until 1 July 2012. Let's hope that nothing changes between now and then to diminish these steps at attempting to make life just that little bit easier for small business in Australia.