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Many small items used in business like mobile phones, laptops or other tools only cost between $500 and $2,000, and have a limited economic life and resale value.

Accounting for them as separate assets and claiming depreciation over several years add to the compliance costs businesses face.

So why not just write them off?

Because the IRD currently imposes an arbitrary write off threshold of $500.

In its recent budget, the Australian government increased the asset write-off limit for small business from $1,000 to a far more reasonable $20,000, as part of a range of initiatives to support smaller businesses and job creation.

There was nothing in New Zealand’s latest budget specifically for small business – perhaps relaxing the write-off limit would be a good starting point, reducing the compliance burden on smaller enterprises.