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Making the most of the $20K Tax Incentive

Do you need a new server? Is it time to update the boardroom projector? Are your desktop computers running more slowly than they used to? Perhaps you’ve put off capital expenditures because of the tax burden involved. If that’s the case, there’s good news. On 12 May 2015, the Australian Government announced its new Budget, which included numerous incentives designed to stimulate small business growth and encourage investment. The new Budget will enable owners of small businesses – that is, businesses that have an annual revenue of less than $2 million – to immediately claim tax deductions for any assets that cost less than $20,000.

What does it mean for you?

Traditionally, small business owners have had access to a small write-off threshold, allowing them to invest a nominal amount in capital and immediately claim it back on tax. Until May of this year, the threshold was set at $1,000 – now it’s 20 times higher. Pending legislative approval, the new rule will stay in effect until 30 June 2017. This gives businesses two years to take advantage of a rare opportunity to invest aggressively in their future growth.

Filling in the details

There are few exemptions to the new accelerated depreciation scheme. You won’t be able to deduct the cost of indoor plants or items that have their own depreciation rules (like capital works or assets allocated to a software development pool). Eligible assets that cost more than $20,000 can be progressively depreciated (that is, claimed back on tax) at a rate of 15 percent in the first year and 30 percent each year thereafter. And everything else? If it’s under $20,000 and will help your business grow – then whether it’s new or second-hand – you can claim it back straight away.

Where should you start?

For an IT company that’s looking to grow, one of the first things to consider is upgrading or replacing hardware that has become obsolete. Moore’s law tells us that computer processor speeds double every 18 months, which is a handy rule of thumb for keeping your equipment up to speed (literally). To help maintain your competitiveness, now might be a good time to consider investing in new servers, computers and other infrastructure.

A crucial caveat

As with all Budget initiatives, the implementation of the accelerated depreciation scheme is subject to parliamentary approval. If it is approved, it will retrospectively include all eligible assets purchased from 7:30 pm on 12 May 2015. You can check the ATO website for news on the status of the legislation. If it’s successful, this might just be the year to bring your small business up to date.

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Just browsing

Your internet browser is the transportation device that allows you to navigate the internet for work and play. And, just as when you’re buying a new car, it’s important to get the right combination of speed, security and versatility. That’s why we’ve summarised the pros and cons of the three major browsers, so you can make the choice that’s best for you.

Firefox

According to research performed in February 2015, Firefox is the world’s third-most popular browser, with more than half a billion users. Firefox is free and open-source, which means that its source code can be accessed and improved by coders across the world. As a result, it has developed a reputation as an unusually responsive browser, with constant updates to enhance its security and incorporate new technologies (such as HTML5).

Firefox is intuitive, highly customisable and a strong performer. In fact, a recent study showed that, in comparison to other major browsers, Firefox scores highest in memory efficiency, reliability and various measures of speed. Users can enhance the Firefox experience with various add-ons, from the popular AdBlock tool to numerous browser themes. The browser is available across most computer operating systems (including Windows, Mac OS and Linux), and there’s an Android mobile app.

Google Chrome

Since its launch in late 2008, Google Chrome has quickly grown to become the world’s most popular browser. In January 2015, StatCounter found that Google Chrome not only accounts for more than half of all desktop browser usage, but is also the most popular browser on mobiles and tablets. Chrome’s popularity is largely due to its seamless integration with Google accounts, and consequent ability to synchronise user data across multiple devices. Like Firefox, it offers numerous add-ons, and frequent updates to optimise speed and security.

Microsoft Internet Explorer

Once the doyen of browsers, Internet Explorer’s popularity has declined in recent years due to issues with speed (it remains the slowest of the major browsers) and its limited offering of add-ons. Nevertheless, it is still used on a significant portion of Windows computers, which come with the browser pre-installed.

In January 2015, Microsoft announced that it would be discontinuing development of Internet Explorer and replacing it with a new browser called Microsoft Edge. Early demonstrations indicate that Edge will significantly outperform Internet Explorer and may even rival Chrome and Firefox. So keep your eyes open for its official launch with Windows 10 on 29 July this year.

Other options

Of course, there’s no reason to limit yourself to the major browsers. Opera is a popular alternative, and was even named the best major desktop browser in 2012. Safari remains the default browser on iOS and OSX devices, and, like Chrome, offers cross-platform synchronisation via iCloud accounts. Finally, the Torch Browser purports to combine the best of both Chrome and Firefox, with in-built features including a BitTorrent client, a download accelerator and a customisable layout.

Final words

Given that the major browsers generally offer comparable performance, your choice will likely come down to personal preference. Whichever you choose, it’s important to update regularly, take appropriate measures to protect your data, and, of course, install a stylish theme.

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