Depreciation Changes to Help Your Business
The government has recently announced two large changes concerning depreciation that are highly beneficial to many business owners. The subjects of change being; low-value asset value and a reintroduction of depreciation on commercial and industrial buildings.
1. Temporary increase to the low-value asset threshold
On March 17th 2020the threshold was increased from $500 to $5,000 and is set to last for 12months. This means you can deduct the full cost of an asset costing less than$5,000 in the year of purchase rather than spreading the cost over the life ofthe asset. Come March 17th 2021, the threshold will revert to a new permanent level of $1,000.
2. Reintroduction of depreciation on commercial and industrial buildings
From the income year starting 2020/21, depreciation on commercial and industrial buildings will be reintroduced. This will see depreciation rates of 2% DV or 1.5% SL be permitted. The purpose is to encourage businesses to invest in new and existing buildings and to assist with cash flow by reducing the tax bill.
If you’d like to learn more about these changes and how your business can benefit, don’t be afraid to get in touch. We’d be happy to help.