A ping pong table for your business is tax deductible: ATO (source: The Age)

The Tax Office is not worried about small businesses looking to rort the Abbott government’s budget measure allowing small businesses to write off assets under-$20,000.

Australia’s two million small businesses were recipients of a $5.5 billion package in the federal budget, including the ability to claim an unlimited number of tax deductions for buying cars and machinery valued at less than $20,000 each.

There have been reports that businesses are already going out and purchasing items such as ping pong tables, and art galleries marketing new artwork for the office to small business owners.

Speaking at a Senate Estimates hearing in Canberra on Tuesday, Tax Commissioner Chris Jordan said he was not worried that the tax breaks would be rorted, and if they were, the ATO had adequate systems and knowledge to catch those breaking the law.

“There’s been many examples of this sort of thing [similar deductions offered] in the past where there’s a start and end date,” he said.

Second commissioner Neil Olesen told the Senate Economics Legislation Committee that the ATO had systems detect claims that “look a bit odd”.

He said a ping pong table was likely to be considered a legitimate item, if used for the business.

“If a small business was to buy items for the exclusive use of their employees while in the workplace, that would probably qualify,” Mr Olesen said.

The ATO was not about to devote more resources to catching rorters, unless it became an issue once tax returns are lodged, he said.

But once returns start rolling in, analytics would be used to “see if there’s anything out of the ordinary”. “If there is, then people can expect a visit from us,” Mr Olesen said.

Mr Jordan said given similar schemes had operated in the past – including the $6500 asset write off under the previous Labor government – the ATO had experience undertaking compliance activities.

He said if people were to try and “sneak something in” that’s not business related, or amend dates on receipts so it falls within the eligible period to claim the deduction, it would spark the ATO’s attention.

Under the budget measures, small businesses with less than $2 million in turnover have two years to take up the tax break, which ends on June 30, 2017.

The Tax Office has already published some guidance around the new deductions, which was included in the May budget but is yet to be legislated, and stated that any items for personal use are not eligible.

Treasury’s Rob Hefferen told senate estimates the cost to the budget of the accelerated depreciation measure – estimated at $1.8 billion over four years – was based on modelling the uptake of similar previous initiatives, including Labor’s.

These costings were reliable he said, although as with any Treasury estimates, there’s always a margin for error.

Senator Mathias Cormann said the measure did not change eligibility for tax deductions of machinery and equipment, but rather how quickly a small business is able to receive the tax deduction.

The measure was aimed at stimulating economic growth. If people tried to circumvent the rules, “there are appropriate rules in place to deal with it”, Senator Cormann said.