Recently during the 2022-23 budget announcement two boosts related to small business, which were announced last year, were flagged again. While not legislated at the time of writing this article, this is great news for the small businesses looking to invest in training their employees and businesses looking to invest in digital services and assets. Both initiatives are discussed in detail below:
Small business – Skills and Training Boost
The government is working on draft legislation to introduce a Skills and Training boost to help small businesses upskill their employees. An additional 20% tax deduction is allowable for eligible expenditure under this scheme.
The eligibility criteria for the Small Business Skills and Training Boost include:
1. The aggregated turnover for small business should be less than 50 million.
2. The boost will be applicable to eligible expenditure incurred between 7:30pm 29 March 2022 to 30 June 2024.
3. For expenditure to be eligible, it should be incurred on providing external training to employees in Australia (can be online mode) and should be provided by the entity registered in Australia.
4. Expenses must be incurred for employees. Exclusions apply to training provided to people other than employees, including sole traders and Partners of partnership structures.
There are different rules as to when the boost for eligible expenditure will be deductible based on when the expenditure was incurred. The boost for eligible expenditure incurred by 30 June 2022 will be deductible in 2023 tax return whereas the boost for eligible transaction incurred between 1 July 2022 to 30 June 2024 will be deductible in the income year the expenditure was incurred.
Small business – Technology Boost
The government is introducing a technology boost to support small businesses aiming to digitalise their business. As per the initiative above, eligible business will be able to claim an additional 20% deduction boost.
The eligibility criteria for the Small Business Technology Boost include:
1. The aggregated turnover for small business should be less than 50 million.
2. The boost will be applicable to eligible expenditure incurred between 7:30pm 29 March 2022 to 30 June 2023.
3. For expenditure to be eligible, it should be incurred on business expenses and depreciating assets that support digital adoption such as portable payment device (e.g., tyro, square and smart pay), subscription of cloud-based services and cyber security systems.
4. There will be annual cap for eligible expenditure of $100,000, limiting the deductible boost to $20,000.
As for the deductibility for the expenditure, it is similar to the Skills and Training boost.
The boost for eligible expenditure incurred by 30 June 2022 will be claimed in 2023 tax return whereas the boost for eligible transaction incurred between 1 July 2022 to 30 June 2023 will be deductible in the income year the expenditure was incurred.
For further queries please get in touch with one of our advisors regarding the advice related to these boosts.
Source: Based on Commonwealth of Australia data.
Based on ATO Advice