Item P10 - Small business entity simplified depreciation
For COVID - 19 changes, see COVID-19 Support Package: Changes to depreciation
Item P10 is ONLY for small business entities using the simplified depreciation rules.
Small business entities can claim an immediate deduction for most depreciating assets purchased after 12 May 2015 and first used or installed ready for use for a business purpose:
- from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020, if they cost less than $30,000 each
- from 29 January 2019 and before 7.30pm (AEDT) 2 April 2019, if they cost less than $25,000 each
- before 29 January 2019, if they cost less than $20,000 each.
The instant asset write-off threshold has increased to $30,000 and has been extended to 30 June 2020.
It has also been expanded to include businesses with a turnover from $10 million and less than $50 million. These businesses can claim a deduction of up to $30,000 for the business portion of each asset (new or second hand), purchased and first used or installed ready for use from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020.
The balance of the general small business pool is also immediately deductible if the balance is less than $30,000 at the end of an income year that ends on or after 12 May 2015 and on or before 30 June 2020 (including existing general small business pool).
The 'lock out' laws have also been suspended for the simplified depreciation rules (these prevent small businesses from re-entering the simplified depreciation regime for five years if they have opted out) until the end of 30 June 2020.
Use the Depreciation worksheet (d) to manage all your depreciating assets, the general small business pool and other pools. Click the Integration tab and choose to which labels in the return calculated amounts should flow.
Is the taxpayer a Small Business Entity?
To use the simplified depreciation rules, the taxpayer must be conducting a small business.
The business's eligibility to use the simplified depreciation rules must be reviewed each year at item 15. See Small business entities election.
From 1 July, 2016 aggregated turnover for small business has been increased from $2 million to $10 million and for the Small business income tax offset (SBITO) $5 million with an increase in the percentage applied to SBI for offset purposes, up from 5% to 8% capped at $1,000.