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James Millar
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The simplified depreciation regime for small business entities (SBE) includes pooling and the low value write off provision. You can’t pick between those two – they both apply or neither apply.

However, if you are not an SBE OR if you are an SBE and don’t want to use simplified depreciation (inc low value write off) then you can use the general depreciation method contained within Div 40 which is the conventional useful life approach.

For tax the goal is usually to write off assets as quickly as possible and you can use a separate accounting depreciation schedule (Xero can do this) to better reflect the useful life approach – better matching doesn’t distort profit as much on front end.

in the backdrop of all of that, good tax strategy involves consideration of the projected profit profile of your business to occasionally match timing of deductions with certain years to optimise tax rates. It may all sound quite complex but a decent upper end suburban accountant should be able to offer this assistance. Can save you thousands and might only cost hundreds for the plan and advice.

Good luck with it all

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