Applying the COVID-19 Support Package: Accelerated depreciation rate

In March 2020, the ATO introduced an option for you to deduct the cost of depreciating assets at an accelerated rate. This is an incentive to businesses with an aggregated turnover of less than $500 million for the 2019–20 and 2020–21 income years.

These changes are part of the ATO's COVID-19 response. In Client Accounting, the accelerated rate isn't applied automatically; you need to check Backing business investment – accelerated depreciation to see if you're eligible for the rate and then apply it yourself.

If you choose to use the accelerated depreciation rate, you must add the asset to the small business pool and click the Apply accelerated rate button on the Tasks bar.

Depreciation will be deducted at 57.5% in the year that you add the asset to the small business pool, rather than 15% of the business portion of the new asset. In later years, the asset will be depreciated as part of the general small business pool rules, at 30%.

The Apply accelerated rate button will be active where the selected asset is:

• a small business pooled asset
• has a purchase date after 12 March 2020
• has a cost of $150,000 or more.

To apply the accelerated depreciation rate

1. From within Client Accounting > Assets tab, double-click on the asset period to open.

2. Select the pooled asset you want to apply the accelerated rate for, and click Apply accelerated rate.

You can also apply the rate from Assets in the browser. From the Client Accounting > Assets tab, click View in browser on the Tasks bar and follow the steps in Accelerated depreciation rules.