Don't rush into asset buying: tax expert

Small business is widely seen as the big winner from Joe Hockey's second budget.

But a major accounting body has sounded a note of caution against rushing in blindly to take advantage of a key component of the treasurer's jobs and small business package.

Small firms and tradies with a total turnover of less than $2 million will get tax cuts, but also a $20,000 instant asset write-off.

It means they can immediately deduct from their tax arrangements most equipment acquired and installed that costs less $20,000.

Tax leader at Chartered Accountants Australia and New Zealand, Michael Croker, says such concessions have been law before, although they have not been as generous.

While Mr Hockey is urging people to go out and spend, Mr Croker says, from past experience, clients get the best outcomes when they take a little time to plan how to take advantage of such a benefit.

He also warns that the Australian Taxation Office will be carefully monitoring how taxpayers respond to the tax concessions.

"Don't do dodgy deals," Mr Croker said.

"The ATO will rightly impose substantial penalties for such behaviour."

CHARTERED ACCOUNTANTS ANZ'S ADVICE:

* THINK

What new equipment does my business really need?

* DON'T RUSH

The new tax break runs until June 30, 2017.

* THINK

How would the new equipment help achieve my long-term business goals?

* DON'T RUSH

A budget announcement isn't law. The necessary tax changes need to get through parliament.

* THINK

How do I finance the purchase?

* DON'T RUSH

Always shop around for the best deal.