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Complete IT Blog                              

Be More Cost Efficient With Upcoming Tax Changes

James David - Wednesday, June 06, 2012

Looking for new software? It may be worth waiting a few weeks until the new financial year.

The many complexities of tax law are not our specialty here at Complete IT; we prefer to be tangled up in Cat6 and SATA cables and our nerd arms tend to collapse under the weight of law textbooks, but a recent article on BIT regarding the 2012/13 budget has piqued our interest.

As we rapidly approach the end of the 2011/12 financial year, it’s time to turn our eyes to necessary business expenditure and tax, and how best to manage the two between the coming and going financial years.

New legislation announced in the 2012/13 budget includes changes for Small Business Entities, those with an annual turnover below two million dollars, which allow an asset with a cost above $1000 and below $6500 to be written off immediately. In the past it was necessary to depreciate assets that cost over $1000 over a span of years; a more complex process with a delayed return.

The new legislation is both simpler and more efficient – the sooner a business can recoup that cost, the sooner it can allocate the resource to an activity that will generate a return on investment.

The interesting angle for IT budgets in small business is that the $1000-$6500 price range is bang on for new equipment. New desktops, NAS drives, laptops and printers, for example, can all handily fall within that range.

So if you’re planning on purchasing something within that range, and don’t need it immediately, it’s more cost-effective to wait until the new financial year. You’ll be seeing the full benefit in your tax return years earlier than if your purchase falls under the 2011/12 rules.

The Complete IT store carries a full range of hardware and software for all levels of IT infrastructure, as well as offering procurement services and support for hardware upgrades and software licensing. All major brands and vendor support included. Head here for the store, and get in contact if you have any questions or would like a quote, here.

Image via Adobe.

 

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