Thursday, 14 April 2022 02:14

Small and Medium Businesses Offered Bonus Tax Deductions on Technology and training in Federal Budget

The Australian Government is delivering $1.6 billion in tax relief to boost small businesses into going digital and upskilling employees.   

For the estimated 3.6m businesses with an annual turnover of less than $50m, eligible costs incurred from Tuesday evening can be deducted from their taxable revenue at an amount greater than what was actually spent. 

The budget also includes several other initiatives for small businesses, including $4.6m over two years for free Beyond Blue mental health support for entrepreneurs. 

How to Claim The Technology Investment Boost

For eligible expenditure incurred between 7:30 pm AEDT 29 March 2022 until 30 June 2022: 

  • Claim the expenditure as usual in your 2021–22 tax return, and
  • Claim the additional 20% bonus deduction for this period in your 2022–23 tax return.

For eligible expenditure incurred from 1 July 2022 until 30 June 2023: 

  • You can deduct the entire 120% in your 2022 - 2023 tax return

Skills and Training Boost

The Government’s Skills and Training Boost encourages small businesses to train new staff and upskill existing staff, helping them to be innovative and grow. This measure will provide tax relief of $550 million. 

Small businesses will be able to claim a bonus 20 per cent deduction for the cost of external training courses delivered to employees in Australia or online, by providers registered in Australia. 

This boost will apply to eligible expenditure incurred from Budget night until 30 June 2024. 

There is no limit on how much spending on training courses can be deducted by a small business at the bonus rate of 120%, but certain rules apply, such as that the course must be run by an external education provider, which needs to be registered in Australia. 

In-house and on-the-job training is not eligible, nor is money spent training people who are not employees of the business. The courses can be provided in person (only in Australia) or online. 



How To Claim The Skills and Training Boost

For eligible expenditure incurred between 7.30 pm AEDT 29 March 2022 until 30 June 2022: 

  • Claim the expenditure as usual in your 2021 - 2022 tax return
  • Claim the additional 20% bonus deduction for this period in your 2022 - 2023 tax return

For eligible expenditure incurred from 1 July 2022 until 30 June 2023:

  • you can deduct the entire 120% in your 2022–23 tax return.

For eligible expenditure incurred from 1 July 2023 until 30 June 2024:

  • you can deduct the entire 120% in your 2023–24 tax return

Be Part Of The Talk

Let us know what you think about this recent government initiatives by joining our exciting talk using a hashtag #Budget2022 both in your Linkedin and Twitter channel and mention us @Metisc in our Linkedin channel  and our Twitter channel @metisccrm, Or, simply drop your comment below.  

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