There’s never been a better time to upgrade your office devices.
Take advantage of the Government’s Temporary Full Expensing scheme.
Unlike a fine wine your IT equipment doesn’t improve with age. As technology advances, the resources and money needed to keep ageing infrastructure going become unsustainable (and a pain in the you know what). Even worse? Your old devices have the potential to dampen productivity, increase outages, cause data corruption, and heighten the risk of a dreaded security breach. All things your business could probably do without.
The issues go beyond technical challenges. Relying on old IT can severely impact the reputation of your business and become a financial drain across your organisation. Global Market Intelligence IDC found that companies who neglect to update their server infrastructure promptly can:
- Lose up to 39% of peak performance
- Add up to 40% in application management costs
But enough of the bad news – let’s focus on the good news!
Thanks to the Temporary Full Expensing Scheme, you can upgrade your ageing IT and save money while you do it. It’s a win-win.
How does it work?
Following the Federal Government’s announcement of the Temporary Full Expensing Scheme, now is the time to upgrade your ageing IT infrastructure. With this scheme, all Australian businesses with up to $5 billion in annual turnover can instantly write off the total cost of new capital assets of any value.
‘What’s the catch?’, we hear you ask. There isn’t one – all you need to do is ensure your new assets are purchased and used or installed between 7.30pm (AEDT) 6 October 2020 and 30 June 2022. 1 Sounds doable to us!
So, why wait? The scheme is temporary, after all. Take advantage of the scheme now to keep your business safe and ahead of the competition – exactly where it belongs.
Let’s take a look at the scheme in action:
Still not sure how the Temporary Full Expensing Scheme could benefit your business? Let’s take a look at a real-life example:
You are the owner of ABC Medical Group, with a turnover of $8 million for the 2021-22 income year. You want to invest in new infrastructure to ensure your clinics operate efficiently and your patients’ data is protected from cybersecurity breaches. So, you come to Spirit for all your IT needs. The total cost of your investment is $200,000 (excluding GST).
If the new temporary full expensing scheme didn’t exist, you could claim a tax deduction of $50,000 for the 2021-22 income year. You could then claim the depreciating value of the asset over future years2 .
Fortunately, with this scheme, you can claim a tax deduction of the full $200,000 in 2021-22 if you installed and used the new server before 30 June 2022. In this circumstance, with a temporary full expensing scheme, you may save up to $60,000 in tax in 2021-22.
That is an extra $60,000 in your pockets.
Ready to move forward?
Why hold back? The scheme is only temporary! Talk to a member of our expert team today, and we’ll be more than happy to provide guidance on what will be best for your business. We can help with all your IT infrastructure needs (and save you some tax $$ in the process).
Disclaimer: This information is provided for your guidance only. The comments are general and do not constitute tax advice. For more information on the scheme and/or your specific business circumstances, please speak to your accountant.
2 Assuming the 4 years effective life applies, the maximum deduction claimable is up to $50,000 per year (over 4 years), giving rise to a tax impact of up to $15,000 (per annum over 4 year).