Claim the Small Business Boosts

Claiming your Bonus Tax Deduction under the Small Business Technology Investment and Skills & Training Boost

A bonus deduction may be available in the 2022–23 tax return for expenses relating to undertaking a digital adoption or skills and training for your business.

Small business technology investment boost

Background

The Technology Investment Boost aims to encourage small businesses to invest in digital technology and digitalise their business operations.

Eligibility

A businesses with an aggregated annual turnover of less than $50 million may be allowed an additional 20% tax deduction to support their digital operations and digitise their operations.

The boost applies to eligible expenditure incurred between 7:30 pm AEDT on 29 March 2022 and 30 June 2023. The boost is for business expenses and depreciating assets and is capped at $100,000 of expenditure per income year. You can receive a maximum bonus deduction of $20,000 per income year.

Any eligible expenditure incurred by an eligible business in 2021–22 and/or 2022–23 income year must be claimed in the 2022–23 tax return.

Read the ATO eligibility criteria here.

Eligible digital expenditure

Expenditure must support a small business’s ability to transition to a digital business.

Items which may be eligible for the technology investment boost include but are not limited to:

digital enabling items – computer and telecommunications hardware and equipment, software, internet costs, systems and services that form and facilitate the use of computer networks
digital media and marketing – audio and visual content that can be created, accessed, stored or viewed on digital devices, including web page design
e-commerce – goods or services supporting digitally ordered or platform-enabled online transactions, portable payment devices, digital inventory management, subscriptions to cloud-based services, and advice on digital operations or digitising operations, such as advice about digital tools to support business continuity and growth
cyber security – cyber security systems, backup management and monitoring services.

The expenditure must be ordinarily deductible under the taxation law. Bonus deduction will be calculated on GST-exclusive amount of expenditure if the business is registered for GST.

In respect of a depreciating asset, the bonus deduction is calculated based on the asset’s cost (regardless of depreciation method). 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. A business cannot claim the bonus deduction for expenditure on a depreciating asset if it sells the asset within the relevant time period.

Small business skills and training boost

Background

The Skills and Training Boost encourages small businesses to train new staff and upskill existing staff, helping them to be innovative and grow.

Eligibility

Small businesses (with an aggregated annual turnover of less than $50 million) may 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.

Training expenses can include incidental costs related to the provision of training, provided they are charged by the registered training provider, such as the cost of books or equipment needed for the course. The training provider must meet certain registration criteria for the bonus deduction.

Businesses may continue to deduct expenditure that is ineligible for the bonus deduction in accordance with the existing tax law.

Find out if you are eligible from the ATO here.

When the skills and training boost applies

This measure applies to expenditure incurred in the period commencing from 7:30 pm AEDT 29 March 2022 until 30 June 2024.

Under the delayed claim rule, you may have to claim a deduction for the eligible expense in your tax return for the income year in which you incurred it and claim the 20% bonus amount in a later year’s tax return. This generally depends on:

when your income year runs, so whether your business is an early, normal or late balancer
at what time during your income year you incur the expense.

How to claim the boosts

Balanced Beans will scrutinise your deductions for all digital upgrades and training over the eligibility period to ensure that we are getting you the full bonus deduction.

When you send in your year-end tax work and accounting file, make sure you attach all the invoices that you think will be eligible under this scheme. To begin with, that would include all eligible new purchases and training programs outlined above.

Along with this, we will also review your files and review a copy of any invoices that we think are also eligible for the bonus deduction.

Unsure whether your business can claim these boosts? Reach out to Balanced Beans your Newcastle Bookkeepers and Accountants.

For more information on these deductions or any other business accountancy or tax matters, contact us online or on (02) 4046 1000.

Servicing Newcastle, Lake Macquarie, Maitland & The Hunter Valley

(02) 4046 1000