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Choosing a new computer to maximise 50% tax break

Choosing a new computer to maximise 50% tax breakIn light of the Government’s recent Budget announcement signaling an increase of the Small Business and General Business Tax Break from 30 percent to 50 percent on eligible business assets, many small businesses will be considering purchasing new PCs or notebooks prior to the end of the financial year. But there are 5 questions every business owner must ask themselves before buying.

A tax break such as this will be especially interesting to small business decision makers who had already identified a need to upgrade, augment or replace their business hardware, big-ticket items and/or computing inventory. If the timing is right—if there is an opportunity to get money back on purchases that are right for your business right now—then a well-researched investment in the computing needs for your business is an excellent way to take advantage of this tax break.

Here are the top five questions you should be asking before you buy:

1.    Which PCs should you refresh?
Should you upgrade PCs on an as-needs basis or should you refresh them all at the same time? In an ideal world it would be easier to refresh them all at the same time, but in reality most small businesses upgrade on an as-needs basis. As you set about assessing your needs, consider that the annual cost of IT support for an individual PC can rise by up to 50 percent from year three to year four of ownership. Multiply that by however many PCs your business is using, and consider whether or not you already have identified problematic PCs that are no longer worth the downtime they are causing.

A smart investment now can save money in the long run. First and foremost, consider refreshing any PCs that are three years old or older and your short-term outlay will be repaid in reduced service fees and more efficient computing performance in the near future.

2.    What about the environmental footprint?
You’ll be pleased to discover that computer processor design has improved in the areas of power consumption and energy efficiency. Testing has shown that a notebook with a new generation Intel Centrino 2 processor will see a 50 percent improvement in average power draw when compared to an older model Intel Centrino Duo processor. What does all this mean to you? Well in plain terms, with better and newer processors, you will save on power consumption bills while you get the job done faster. Notebook computers are generally more power efficient than desktops and a practical tip for everyone is to make sure you turn your computer and monitor off when it’s are not being used for extended periods of time.

3.    Notebook or desktop?
The average cost of notebooks has come down significantly over the past few years, with leading name brand notebooks based on top of the line Intel Centrino 2 processor technology priced at around $1,500. Just three years ago, you would have paid closer to $3,000 for the top end system and the performance would have been 40 percent less efficient than today’s. So laptops really should be in your consideration set, particularly if you or your staff are on the road a lot, meeting with customers and clients outside of your own office.

Additionally, many small businesses report a higher productivity rate and satisfaction rate from staff with notebooks due to the increased flexibility they offer. Nevertheless, there is still a place for desktops in small businesses, particularly for staff that are predominately deskbound. Ergonomic considerations of flat panel monitors, mouse and keyboards should also be taken into consideration, and while these can easily and effectively be used with a notebook, they do add to the total system cost when compared to desktop PC pricing. If you are upgrading old systems however, you can hold on to your older monitors and keyboards and use them with your new desktop (ask for a “headless” desktop) or notebook. CONTINUED…..

4.    What spec should you look for?
It is up to you to find a brand you like—based on a variety of comparison points—but it is important to understand the processing power on offer to you, to ensure you make a purchase that will actually suit your needs. Think of the micro-processor as the brains of your PC or notebook and you’ll appreciate why the performance and functionality of your purchase revolves around which microprocessor you specify.

There are lots of different processors inside a wide variety of notebooks and desktops to suit your needs. Typically you will find that any system that includes high performance processors will also be configured with commensurate hard disk, memory and operating system. And of course when it comes to notebooks, battery life longevity and portability is a critical consideration.

If you need to add computers to your business, make sure you add the right ones. With the Government stimulus package backing you up at the moment, you get tax deductions on your investment in notebooks or desktops with the processing power you need, but do make sure you check with your accountant on the best way forward.

One example offered by the Government in conjunction with the Budget announcement is as follows:  “A small business that buys and installs a $2,000 computer before the end of June 2009 can claim an additional $1,000 deduction in your 2008-09 tax return.”

5.    Where is the best place to buy?
There is a larger choice of laptops and desktops on the market than ever before, which can be a little daunting when it comes to choosing which model to buy but offers a great opportunity when it comes to negotiation, particularly in the current climate. You can purchase your new PC from a local retailer or from one of the leading mass merchant retailers. In some cases you can purchase directly from the PC manufacturer themselves, so take a look at their websites to compare options and pricing.

When you are making your decision on where to buy, make sure you pay attention to the software bundles. You will find that most of the mass merchant retailers have a great range of offerings but they do tend to have more consumer-focused software bundles. So while you are shopping around, look out for small business-focused computer retailers as well who may carry more relevant offerings.

The small business decision maker who is considering the purchase of computers as a way to take advantage of the tax break must:

  • Seek advice from a tax accountant or other financial expert to ensure that the purchases you make and the steps you take to finance those purchases are consistent with the eligibility requirements of this tax incentive package
  • Seek advice from a trusted IT advisor or retailer who can talk you through your business requirements and processing power options, and guide you in making the right purchase.

With such a vast range of computer offerings on the market today, coupled with Government stimulus packages and retailers who are willing to negotiate, now is a great time to consider upgrading some or all of your small business PCs. Have fun shopping around!

— Kate Burleigh is Intel’s national marketing manager for Australia and New Zealand

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Kate Burleigh

Kate Burleigh

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