Simplified trading stock
Small business entities only need to conduct stocktakes and account for changes in the value of trading stock in limited circumstances (see Stock on hand).
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Prepaid expenses
Small business entities can claim an immediate deduction for certain prepaid expenses.
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Simplified depreciation rules
If you are an eligible small business entity you may choose to calculate deductions for your depreciating assets using these rules.
Under the small business entity depreciation rules, the 'taxable purpose proportion' (which includes the proportion the asset is used in your income-earning activities) of the adjustable value and some other costs (see Depreciating assets generally) of most assets can be deducted. Under these rules:
- if you purchased assets from 7.30pm (AEST) on 12 May 2015 and first used or installed them ready for use:
From 7.30pm (AEST) on 12 May 2015 until 28 January 2019 |
You can immediately deduct the taxable purpose portion of most depreciating assets costing less than $20,000 each (the instant asset write-off threshold). |
From 29 January 2019 until before 7.30pm (AEDT) 2 April 2019 |
You can immediately deduct the taxable purpose portion of most depreciating assets costing less than $25,000 each (the instant asset write-off threshold). |
From 7.30pm (AEDT) on 2 April 2019 until 30 June 2020 |
You can immediately deduct the taxable purpose portion of most depreciating assets costing less than $30,000 each (the instant asset write-off threshold). |
- other depreciating assets are pooled in a general small business pool and deducted at the rate of 30%
- newly acquired assets are deducted at the rate of 15% in the first year, regardless of when they were acquired during the year.
The balance of the general small business pool is also immediately deducted at the end of the income year if the balance at that time (before applying the depreciation deductions) is less than the relevant instant asset write-off threshold.
If you cease to be a small business entity, or if you choose to stop using the simplified depreciation rules, the rules continue to apply to assets in the general small business pool for the 2019 and later income years. Depreciating assets you start to use, or start to have installed ready for use, cannot be added to the general small business pool until an income year in which you are a small business entity or choose to use the simplified depreciation rules.
A small business entity can choose to claim deductions under either the simplified depreciation rules or the uniform capital allowance (UCA) rules for certain depreciating assets used in the course of carrying on a business of primary production. The choice is available for water facilities, fencing assets, fodder storage assets and depreciating assets relating to landcare operations, electricity connections and telephone lines. Once you have made the choice it cannot be changed.
For horticultural plants (including grapevines) you must use the UCA provisions.
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