Small Business Boosts & Incentives

The Australian Government has announced the following 3 measures to assist small businesses that have an aggregated annual turnover of less than $50 million:

Small Business Technology Investment Boost

About the boost

Small businesses can now deduct an additional 20% of the expenditure incurred for the purposes of business digital operations or digitising its operations on business expenses and depreciating assets.

The boost is capped at $100,000 of expenditure per income year. You can receive a maximum bonus deduction of $20,000 per income year. The maximum bonus deduction a business can claim is $40,000 for the entire period.

Eligibility

To access the small business technology investment boost, your business needs to be a small business entity – aggregated annual turnover of less than $50 million in the income year the expense was incurred.

The expenditure must:

  • Already be deductible for your business under taxation law;
    Be for the purposes of business digital operations or digitising its operations on business expenses and depreciating assets (i.e.portable payment devices, cyber security systems or subscriptions to cloud based services).
  • Be incurred between 7:30 pm AEDT 29 March 2022 and 30 June 2023 (if you are a normal balancer i.e. Financial year starts on 1 July and ends the next year on 30 June)

If the expenditure is on a depreciating asset, the asset must be first used or installed ready for use for a taxable purpose by 30 June 2023.

Find out if you are eligible for the Small business technology investment boost.

Small Business Skills and Training Boost

About the boost

Small businesses will be able to deduct an additional 20% of expenditure that is incurred for the provision of eligible external training courses to their employees by registered providers in Australia.

Businesses may continue to deduct expenditure that is ineligible for the bonus deduction in accordance with the existing tax law. The special rules will apply to when the bonus deduction can be claimed in tax returns depending on a business’s balancing date.

Eligibility

To access the small business skills and training boost, your business needs to be a small business entity – aggregated annual turnover of less than $50 million in the income year the expense was incurred.

There may be fringe benefits tax (FBT) consequences associated with the expenditure you incur. For more details, refer to Fringe benefits tax – a guide for employers.

Where the training is a component of a larger program or course of training, the enrolment or arrangement relating to the relevant expenditure must be made or entered into at or after 7:30 pm (by legal time in the ACT) on 29 March 2022.

Find out if you are eligible for the Small business skills and training boost.

Small business energy incentive – Not yet law

About the boost

While not yet law, the government has announced that the energy incentive will allow businesses to deduct an additional 20% of the expenditure incurred on eligible assets or improvements to existing assets for supporting electrification and more efficient energy use.

Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus deduction being $20,000 per business.

Eligibility

To access the small business technology investment boost, your business needs to be a small business entity – aggregated annual turnover of less than $50 million in the income year the expense was incurred.

The expenditure must:

  • Be first used or installed ready for use between 1 July 2023 and 30 June 2024 (if you are a normal balancer i.e. Financial year starts on 1 July and ends the next year on 30 June)

Learn more about the small business energy incentive.

How to claim the boosts?

These boosts are not currently included in the scope of work provided by Tailored Accounts or Tailored Tax.

To claim these boosts, Tailored Tax clients are able to either:

  • DIY – The client can generate a spreadsheet with all eligible transactions, sending this data to the Tailored Tax representative in charge of your 22-23 tax; OR
  • Get Additional Support – Tailored Accounts will be happy to assist in gathering this information. Please contact us so we can scope the work and provide you with a quote.

 

If you’re not an existing client, feel free to contact us as well should you need any assistance with claiming your boosts.

Source: Australian Taxation Office

Compiled & Edited by Tailored Accounts

Updated 9th October 2023 to include small business energy incentive.

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