The technology investment boost and the skills and training boost for small businesses were both legislated on Friday 23 June 2023.
These boosts allow eligible businesses to claim a ‘bonus’ tax deduction equal to 20 per cent of qualifying expenditure.
Find out more about each boost and how it may impact your business in the 2023 and the 2024 financial years below, and if you have any questions please feel free to reach out to your client manager or contact us to discuss your situation.
Technology Investment Boost
What: Access to a bonus deduction capped at the lower of 20% of eligible expenditure OR $20,000 per financial year. Eligible expenditure includes costs associated with digital operations or digitising their operations. The eligible costs are broad and include, but aren’t 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 and consulting services
- e-commerce — goods and 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, or
- cyber security – cyber security systems, backup management and monitoring services, consulting services.
Who: This boost is available to small businesses with an aggregated annual turnover of less than $50million (available to all entity types)
When: Available on eligible expenses incurred between 29 March 2022 and 30 June 2023. For expenses incurred within the 2022 financial year, you will be able to include those in your income tax return for 2023.
Given the timing of legislation, it’s important to note that the Technology Investment Boost is retrospective – it does not apply to expenditure incurred from 1 July 2023 onwards (standard deduction and depreciation rules apply).
Skills & Training Boost
What: Access to a bonus deduction capped at the lower of 20% OR $20,000 per financial year for expenditure related to training employees in-person in Australia or online, by an external Registered Training Provider.
- The training must be provided by a provider registered with at least one of the following government authorities: Australian Skills Quality Authority (ASQA) (within the meaning of the National Vocational Education and Training Regulator Act 2011); Tertiary Education Quality and Standards Agency (TEQSA) (within the meaning of the Tertiary Education Quality and Standards Agency Act 2011); Victorian Registration and Qualifications Authority (within the meaning of the Education and Training Reform Act 2006 (Vic)); or Training Accreditation Council of Western Australia (within the meaning of the Vocational Education and Training Act 1996 (WA)).
Who: This boost is available on employee training costs for small businesses with an aggregated annual turnover of less than $50million (available to all entity types). Expenditure for training persons other than employees is not eligible — i.e. the bonus deduction is not available for the training of non-employee business owners such as sole traders, partners in a partnership and independent contractors.
When: Available on eligible expenses incurred between 29 March 2022 and 30 June 2024. For expenses incurred within the 2022 financial year, you will be able to include those in your income tax return for 2023. The expenditure may be incurred in a different year to the year in which the training is delivered.
The Skills & Training Boost is available for eligible training costs incurred until 30 June 2024, and actual training may occur after this time. You can check if a training provider is registered via this website.
If you have any questions about either boost and how they may impact your business, please feel free to reach out to your client manager or contact us to discuss your situation.
The articles, templates, and media posted on this blog do not give business, accounting, taxation or financial planning advice and should not be relied upon as such. The articles are intended to provide information in a summary form and are general in nature. Formal business, accounting, taxation or financial planning advice should be sought in particular matters. O’Connells OBM Pty Ltd accepts no liability in respect of this information and any person acting solely on the information contained within does so entirely at their own risk.