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Budget 2024 | The Government has confirmed changes to personal income tax, the independent earner tax credit, in-work tax credit, and the minimum family tax credit. Find out more: Personal income tax threshold changes

Assets lose value over time as they get older. This loss of value is called depreciation. Businesses claim depreciation loss as a deduction expense each tax year.

You can claim a deduction for depreciation loss on capital assets. You can do this for those you own, lease or buy under a hire purchase agreement and use, or intend to use, in your business.

Revenue or capital expenses

Most businesses have both revenue and capital expenses:

  • Revenue expenses are generally items used in the day to day running of a business. They can be for things like stationery, rent and power. You can deduct these expenses in tax returns.
  • Capital expenses are for capital assets kept for longer than a year. These expenses can include computers, vehicles and machinery. You only claim depreciation loss on capital assets.

Deciding not to depreciate

Generally, businesses must claim depreciation on their capital assets. There may be assets you decide not to depreciate.

You need to tell us when you decide not to depreciate an asset.

Last updated: 05 Oct 2023
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