Small Business Concessions

Businesses that have an aggregated turnover of less than $50m qualify for some special tax treatments. They key ones that affect the R&DTI are:

  • Instant Asset Write-Off. The threshold changes (it is usually $1,000, but is currently unrestricted), and it allows the total value of an asset to be included as a tax deduction in the year of purchase, rather than applying depreciation rules to reduce its value over time. The long term effect is the same, but if the IAWO rules are used, the decline in value may not be eligible for R&DTI.
  • The use of a small business pool for simple depreciation of assets means that the decline in value cannot form part of an R&DTI claim.
  • Prepayment of invoices. If a service is to be provided within the next 12 months, then pre-payment of invoices is allowed to be claimed under R&DTI (for larger business this is specifically excluded).
  • 2 year assessment period. A tax return can only be amended within 2 years of the lodgement (normally 4). This means that after 2 years, you do not need to be concerned whether a return can be audited by the ATO.

For the full list of concessions see here.