Small business asset write-offs: be careful not to under-claim

Small businesses with a turnover of less than $10 million can write off assets costing less than $20,000 each in their 2016–2017 return. All simplified depreciation rules will apply to assets when choosing this method. 

The ATO has observed that some tax agents have under-claimed by not applying all of the simplified depreciation rules. To use simplified depreciation rules correctly, the business must:

  • write off eligible assets costing less than $20,000 each;
  • pool most other depreciating assets that cost $20,000 or more;
  • write off the small business pool balance if it is less than $20,000 at the end of an income year; and
  • only claim a deduction for the portion of the asset used for business or other taxable uses.

The $20,000 write-off threshold now applies until 30 June 2018.

Small businesses with tax debts: setting up a payment plan

The ATO reminds small businesses that if they have a tax debt of $100,000 or less, they can take advantage of the ATO's self-help service to set up a payment plan in two easy steps:
Use the payment plan estimator to work the options.

With their Tax File Number (TFN) or Australian Business Number (ABN) on hand, set up a payment plan by either phoning the ATO's automated service on 13 72 26 or using the online services for sole traders and individuals on their myGov account.

In some circumstances, the ATO says, a business may be eligible for interest-free payment plans for activity statement debts. To find out about eligibility, phone the ATO on 13 11 42.
If a business pays its tax debt late or by instalments, interest accrues on the unpaid debt. And even where a business has a payment plan, the ATO says it still needs to lodge all of its ongoing activity statements and tax returns on time, even if the business cannot pay by the due date.

To deal with tax debts of more than $100,000, businesses can phone the ATO on 13 11 42.