In 2023, small businesses have an opportunity to invest in their future and stay competitive in the digital economy with two government initiatives: Small Business Technology Investment Boost and Small Business Skills and Training Boost.
The boost measures are not currently law, but draft legislation is being considered. Once passed through parliament, the programs will allow small businesses to claim an additional 20% tax deduction on costs incurred for new technology, digital solutions, training, and development programs for employees.
Who can be considered?
To be considered for the Small Business Technology Investment Boost and Skills Training Boost programs, businesses must meet certain qualifications. These include being an Australian business with an ABN and having an annual turnover of less than $50 million.
How to participate?
The extra tax deductions will be claimed in the 2023 and 2024 tax returns for your business. To participate in the Small Business Technology Investment Boost and Skills Training Boost programs, businesses should:
- Assess their technology and training needs and identify areas for improvement.
- Develop a plan outlining any future expenditure which may qualify for the boosted deductions, and confirm with your accountant that the expenditure will be eligible. Your accountant should also review expenditure from 29 March 2022 onwards, since that is the date eligibility commences.
- Purchase the necessary technology or training before the deadlines (30 June 2023 for the Technology Investment Boost and 30 June 2024 for the Skills and Training Boost) in order to ensure they can receive the tax benefit.
The Small Business Technology Investment Boost and Skills Training Boost programs have certain technical requirements for eligibility. Find out more below:
Technology Investment Boost
To be eligible for the additional 20% deduction, the expenditure must be incurred in relation to the businesses’ digital operations and must meet the following criteria:
- the costs must be incurred between 29 March 2022 and 30 June 2023;
- the expenditure must be deductible under another tax law;
- if the expenditure relates to a depreciating asset, then the asset must be first used or installed ready for use by 30 June 2023;
- An annual $100,000 cap on expenditure will apply to each qualifying financial year.
Skills and Training Boost
The eligibility criteria for the additional 20% deduction includes the following points:
- The expenditure must have incurred between 29 March 2022 and 30 June 2024, and be deductible under tax law (e.g. the training is business related);
- Training must be provided by an external registered training provider (internal training is not eligible);
- The business must be charged directly or indirectly by the registered training provider.
Need a hand?
Our team is available to assist you in determining your eligibility and how these incentives can benefit your business’s growth and success in the digital economy through technology and training investments. Contact us today!