Two things you need to know about websites

​​A good website is an invaluable piece of real estate in the virtual world, representing your business or company, telling your story, and potentially making you money. It is also an investment which, like other business investments, is depreciable.

1.How does a website benefit your business?

It’s not enough to just run your business in a physical location anymore. The internet has opened up the potential for every business, everywhere, to reach beyond their physical location and out into the world.
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The world is an increasingly online place, where information is readily available – and not only is it readily available, it is expected. Yellow pages are a thing of the past as people turn to google or Facebook recommendations when seeking a good or service. Information is expected: many people will turn to the internet first to research a company they are interested in, by looking for its website and reviews. If a company does not exist in the virtual world, it becomes close to invisible in the real world.

​​If you want to know more about websites, or are interested in having a chat about a website for your business, contact Doug on 0417 963 355 or Michelle on 0422 448 018 at ipCreative.

Here's an example of our website, created by the ipCreative team

2. Did you know a website is a depreciable asset?

Depreciating assets are often thought to be physical assets, however this is not always the case. Building a new website or developing an existing one is also considered a depreciating asset.
In 2015 the Australian Taxation Office introduced the instant asset write-off for assets purchased under $20,000.

This meant that businesses with a turnover less than $10 million could choose to apply the small business concessions rules and write off qualifying business assets that cost $20,000 or less (excluding GST). This incentive is said to expire 30 June 2018.
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While many people have been trapped into thinking the Australian Government is going to give them a free $20,000, this is not the case.

​The immediate deduction of business assets (costing less than $20,000) creates a tax advantage by significantly reducing a businesses profits, and consequently the taxable income – simply meaning you will pay less tax than if you chose to depreciate the asset under general depreciation rules. Immediate also means ‘in the first year’, not getting cash back straight away.

To be eligible for the $20,000 immediate write-off your website and business will need to meet the following criteria:

1.  The costs of the website development have not been allocated to a software development pool
2.  Your business turnover (sales) is less than $10 million
3.  You pool other depreciating assets that cost more than $20,000
4.  You follow the simplified depreciation rules.
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If you choose not to (or cannot) use the immediate write-off, your software development costs can be depreciated using the prime cost (i.e. straight-line) depreciation method OR included in a software development pool. The ATO have assessed websites to have an effective life of 5 years, when purchased after 1/7/15.

Should you need help in assessing whether your business is eligible to use the small business concessions and the associated tax benefit you may receive, feel free to contact the BHR Papalia office in Bunbury on 9791 5877.
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