New Tax Incentives for Small & Medium-Sized Businesses – Action Required by 30 June 2023

Last week, two new tax incentives were passed into law which will benefit small and medium-sized businesses.

1. The Skills & Training Boost – from 30 March 2022 to 30 June 2024.
2. The Technology Investment Boost – 30 March 2023 to 30 June 2023.

These measures will assist small and medium-sized businesses to recover some of their investment costs in digital technology and up-skilling employees.

 

Skills & Training Boost

• Under this incentive, eligible businesses can claim an additional 20% deduction on expenditure incurred for the external training of employees by higher/vocational education or training providers that are registered in Australia.
• This incentive will not apply to expenditure related to the provision of on-the-job training or in-house training.
• This incentive only applies to employees of businesses – it does not apply to training costs incurred for non-employees such as: business owners, independent contractors, sole traders, or partners in partnerships.
• This incentive applies to eligible expenditure incurred from 7:30pm on 29 March 2022 until 30 June 2024.
   

Technology Investment Boost

• Under this incentive, eligible businesses can claim an additional 20% deduction on expenditure incurred wholly or substantially for the purposes of the business’ digital operations.
• The maximum deduction per year under this incentive is $20,000, so there is no additional deduction once annual spending on digital operations exceeds $100,000.
• Digital operations is a broad term which may encompass: digital-enabling items (e.g., hardware and software), digital media and marketing tools (e.g., web page design), e-commerce platforms or devices, and cyber security systems.
• This incentive applies to eligible expenditure incurred from 7:30pm on 29 March 2022 until 30 June 2023. Any capital assets acquired as a result of this spending must be installed ready for use before 1 July 2023.

 

Who Is Eligible?

• Small and medium-sized businesses with an aggregated annual turnover of less than $50 million in the year in which the eligible expenditure is incurred.

 

I Am Eligible – What Do I Do Next?

• As the Technology Investment Boost ends this Friday, consider whether your business needs to spend on digital items and assess whether there is room in the budget to advance this expenditure into this current 2022-2023 financial year.
• Review your spending on external training or digital-related items since 30 March 2022 to assess whether any spending may qualify for the additional 20% deduction and if so, consider separating this spending into separate accounts in your records to make it easier for your tax accountant to identify and claim it in your 2023 or 2024 Tax Returns.

 

Please call or click to discuss with a Macro Group Team Member if you would like further information.

 

The Macro Group Team

 

Date: 26/06/2023
 
The Macro Group Limited AFSL:485843 Tax Agent Number 24 76 5236.

The information in this article  contains general information only. We have not taken into consideration any of your personal objectives, financial situation or needs. Before taking any action, you should consider whether the general advice contained in this communication is appropriate to you having regard to your circumstances and needs, and seek appropriate professional advice if you think you need it. We recommend that you consult a licensed or authorised financial adviser if you require financial advice that takes into account your personal circumstances.