The Federal Government introduced Small Business Skills and Training Boost and Technology Investment Boost legislation, which took effect in late June 2023.
The Small Business Skills and Training Boost and Technology Investment Boost both allow for eligible businesses to deduct an additional 20% on relevant expenditure.
Eligibility
Small Business Skills and Training Boost
Eligible Small Businesses will be provided a bonus 20% deduction on eligible expenditure on external training for their employees between 7:30pm (AWEST) 29 March 2022 and 30 June 2024.
Training expenses include incidental costs related to the provision of training, undertaken by a registered training provider, such as cost of books or course equipment. The registered trainer must meet specific registration criteria for the deduction.
To access the additional deduction, an entity must carry on business with an aggregated turnover of less than $50m in the income year that the expenditure was incurred.
The eligible expenditure must be:
- For the provision of training to employees, either in person in Australia or online – training of non-employee’s business owners such as Sole Traders, partners in a partnership and independent contractors are not eligible for the deduction.
- Charged, directly or indirectly by a registered external training provider and not be the small business or an associate of the small business.
- Already deductable for the business under the taxation law
- Incurred between 7:30pm on 29 March 2022 and 30 June 2024.
Small Business Technology Investment Boost
Eligible Small Businesses will be provided a bonus 20% deduction on expenditure for the purpose of their digital operations between 7:30pm (AWEST) 29 March 2022 and 30 June 2023.
To access the additional deduction, an entity must carry on business with an aggregated turnover of less than $50m in the income year that the expenditure was incurred.
The eligible incurred expenditure must be wholly or substantially for the purposes of the digital operations of the entity or digitising the operations of the entity. This includes:
- Digital enabling items – internet costs, telecommunications hardware and equipment and software.
- Digital Media and Marketing – audio and visual content that can be created, stored, accessed and viewed on digital devices.
- E-commerce – goods and services supporting digitally ordered transactions, subscriptions to cloud based services, portable payment devices and advice on digital operations.
- Cyber security – cyber security systems, backup management and monitoring services.
The expenditure must also be:
- Already deductable for the business under the taxation law
- Incurred between 7:30pm on 29 March 2022 and 30 June 2023.
An annual cap applies for the technology investment boost. Expenditure up to $100,000 is eligible for the bonus, which is capped at $20,000 per year. The total deduction that can be claimed for the entire period (7:30pm (AWEST) 29 March 2022 and 30 June 2023) is capped at $40,000.
When to claim the bonus deduction
The deduction should be claimed in the year of the incurred expenditure and the FY22 and FY23 bonuses to be claimed in the FY23 tax return.
In some instances, the timing may differ. This will depend on:
- When your income year runs; and
- At what time the expenditure is incurred during your income year
Should you have any questions or need any help ensuring you receive all available assistance, please reach out to our team and we will endeavour to do our best to assist.
The team at Rose Partners
