In the 2023/24 Federal Budget it was announced that small businesses will be provided with a bonus deduction for certain types of expenditure.

The Small Business Technology Boost provides eligible small businesses (a business with a turnover of less than $50 million) with a tax incentive to invest in technology and digital tools. Small businesses can now claim a bonus 20% deduction for eligible assets such as hardware, software including cloud based software subscriptions, and IT equipment. 

It is important to note that eligibility criteria do apply for both the Small Business Technology Boost and the Small Business Training Boost (discussed in more detail below).

And importantly although these incentives were announced in the 2022/23 Federal Budget, due to the change in Government they have not yet been passed as legislation at the time of writing. The specifics below may be subject to change but hopefully we have some certainty soon with the end of the financial year fast approaching.

The first of the incentives is the Small Business Technology Investment Boost;

• In addition to the standard deduction you will receive a bonus 20% deduction for eligible expenditure up to a maximum of $20,000 per year (ie up to $100,000 of eligible expenses will provide a bonus deduction of $20,000). 
  
• The bonus deduction will be capped at $20,000 for the 2022 financial year and a further $20,000 in the 2023 year, where both bonus deductions will be claimed in the 2023 tax return.

• Eligible expenditure may include items associated with digital adoption such as;
  
  

1. Computers and telecommunications hardware & equipment, some software systems & services,
2. Portable payment devices, 
3. Cyber security systems.
4. Digital media & marketing – audio visual content that can be created, accessed, stored or viewed on digital devices.
5. e-commerce – supporting digitally ordered or platform enabled online transactions.

• The expenditure needs to be incurred between 29 March 2022 & 30 June 2023.

• If depreciating assets are acquired the asset must be installed and ready for use by no later than 30 June 2023, and the asset must still be held at 30 June 2023.

Ineligible expenditure includes salary & wage costs, capital works associated with buildings, financing costs, training & education costs and expenditure that may be included in trading stock. 

The second incentive announced is called the Small Business Skills & Training Boost.

The important things to note;

• In addition to the normal deduction you will be able to claim 20% of the eligible expenditure, however no cap applies. 
  
• The expenditure is available for external training provided to their employees, either in person, in Australia or online.
• The training must be charged either directly or indirectly by a registered training provider and be within the scope of the providers registration.
  
• The registered training provider must not be the small business or an associate of the small business.
  
• The expenditure must already be deductible under tax law.
  
• Expenditure must be incurred between 29 March 2022 and 30 June 2024. 
• The expenditure must be for the provision of training, where the enrolment or arrangement with the registered training provider occurs after 7.30pm on 29 March 2022.

We are here to assist you in identifying eligible assets and training programs, and help you make the most of these incentives. 

Please do not hesitate to contact us if you have any questions or require assistance with claiming these initiatives.