The Australian Government has announced the following 3 measures to assist small businesses that have an aggregated annual turnover of less than $50 million:
- Small business technology investment boost
- Small business skills and training boost
- Small business energy incentive – not yet law.
Each measure will allow an extra 20% tax deduction for eligible expenditure.
Because these measures are structured similarly, it’s important to know the differences and understand when to claim them, so you can get it right.
The income year you claim the bonus deduction will depend on:
- when your income year runs; for example, whether your business is an early, normal or late balancer
- when you incur the expense.
All businesses will claim the general deduction for the expense in the income year it was incurred. However, the timing for claiming the bonus deduction will depend on whether they’re an early, normal or late balancer and which bonus deduction they’re claiming.
A detailed explanation of when you can claim the extra 20% deduction for each measure is available on ato.gov.au.
Small business technology investment boost
Under this boost, small businesses can deduct an additional 20% of the expenditure incurred to support their digital operations and to digitise their operations. It’s a broad incentive intended to cover a wide range of business expenses and technology assets to help digitise small businesses. This includes, but is not limited to, expenditure on portable payment devices, cyber security systems and new and ongoing subscriptions to cloud-based services.
Up to $100,000 of total expenditure will be eligible for the boost per income year or relevant time period, with the bonus deduction capped at $20,000 for each period.
This boost applies to eligible expenditure incurred between 7:30 pm AEDT 29 March 2022 and 30 June 2023. If the expenditure is on a depreciating asset, the asset must have first been used or installed ready for use for a taxable purpose by 30 June 2023.
Small business skills and training boost
This boost allows small businesses to deduct an additional 20% of the expenditure incurred for external training courses delivered to employees by registered training providers.
This boost applies to eligible expenditure incurred between 7:30 pm AEDT 29 March 2022 and 30 June 2024.
Small business energy incentive
This measure is not yet law. The government announced the incentive will allow businesses to deduct an additional 20% of the expenditure incurred on eligible assets or improvements to existing assets for supporting electrification and more efficient energy use.
Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus deduction being $20,000 per business.
The incentive, if it becomes law, will apply to eligible assets first used or installed ready for use for any purpose and a taxable purpose, or improvement costs incurred, between 1 July 2023 and 30 June 2024.
Remember, a registered tax professional can help you with your tax.
Last modified: 12 Sep 2023
QC 73231
Small business boost measures and the energy incentive | Australian Taxation Office (ato.gov.au)
