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  • Claim backing business investment this tax time

    When preparing for your tax return, remember that businesses with an aggregated turnover of less than $500 million may be eligible to claim an accelerated depreciation deduction for certain new assets.

    The backing business investment (BBI) was introduced to encourage a stronger economic recovery from the COVID-19 pandemic.

    To be eligible to claim the accelerated deduction in your 2020 tax return, each depreciating asset must:

    • be new and not previously held by another entity (other than as trading stock)
    • be first held on or after 12 March 2020
    • be first used or first installed ready for use for a business use on or after 12 March 2020 until 30 June 2020 (assets first used or installed from 1 July 2020 to 30 June 2021 are still eligible, but cannot be claimed until the 2021 tax return)
    • not have already had the instant asset write-off rules or other depreciation deductions applied.

    There is no limit to the cost of each eligible asset, except for cars, and no limit to the number of assets the BBI can apply to.

    You can only claim a deduction for the taxable (or business) use portion of each asset.

    The Depreciation and capital allowances tool will be updated from 1 July 2020 to include the BBI. You can use this tool to work out your depreciation claim to include in your tax return.

    Remember to keep all supporting documentation just like you would with any other claim.

    Registered tax professionals can help you with your tax.

    See also:

    Last modified: 19 Jun 2020QC 62947