A reminder that the Government Covid-19 scheme to assist businesses by allowing 100% depreciation on capital purchases up to $5000 finishes in 3 weeks’ time on the 16 March 2021.
According to the IRD website the legislation passed last year temporarily increases the low-value asset threshold for depreciation from $500 to $5,000. The intention is to allow businesses to deduct the full cost of asset purchases with a value of less than $5,000 in the year they purchased them, instead of having to spread the cost over the life of the asset. This threshold will drop back to $1000 per item (instead of $500 previously ) after the 16 March 2021.
According to an accountancy source, purchases should be in increments of less than $5000 per day per invoice. For example, purchasing two of the same items of $4000 each on the same day may not be 100% deductible and may need to be depreciated over its normal life.
Please refer to the IRD website https://www.ird.govt.nz/covid-19/business-and-organisations/specific-income-tax-issues/depreciation-and-low-value-assets or seek your own professional tax advice.
Make sure you support our group of Supplier members for the purchasing of these items!! I am sure they can assist you to maximise your spend.