As part of the Federal Budget 2022 – 23, the government announced support for small business, in the form of two bonus tax deductions:

  1. The Technology Investment Boost
  2. The Skills and Training Boost.

The legislation enacting both announcements has now passed Parliament and impacts the preparation of 2023 income tax returns.

Who is eligible?

Small businesses with an annual aggregated turnover of less than $50 million.

What can I claim?

The Small Business Technology Investment Boost provides an additional 20% deduction of expenditure incurred for the purposes of a business’ digital operations or digitising its operations – covering both business expenses and depreciating assets.

The details:

  • This includes portable payment devices, cyber security systems, and subscriptions to cloud based services
  • Depreciating assets must have been used or installed by 30 June 2023
  • Annual cap on expenditure of $100,000 applies for each qualifying income year (so maximum additional deduction is $20,000 per year)
  • Deductions that are above the cap are dealt with under the existing law
  • Applies to expenses incurred between 7:30 pm AEDT on the 29th of March 2022 and the 30th of June 2023.

The Small Business Skills and Training Boost provides an additional 20% deduction for expenditure that is incurred for the provision of eligible external training courses to their employees. We suspect that the eligible claims will be limited.

The details:

  • Training from registered providers in Australia only, registered with one of the following authorities:
    • Australian Skills Quality Authority
    • Tertiary Education Quality & Standards Agency
    • Victorian Registration & Qualifications Authority
    • Training Accreditation Council of WA
  • The registered provider can’t be an associate or the small business making the claim
  • The expenditure must already be deductible under existing tax laws
  • No annual cap
  • Expenses incurred between 7:30 pm AEDT on the 29th of March 2022 and the 30th of June 2024.

What action do I take?

Extracting this information requires intimate knowledge of your subscriptions, purchases, and technology suppliers, beyond your General Ledger. We recommend that you collate this internally. We have a spreadsheet available which may assist with the collation of these documents. Please contact your Holman Hodge adviser for a copy.

Please return the populated spreadsheet to us with your annual financial information.

Any questions, contact your Holman Hodge adviser.

You can find the ATO’s update relating to these boosts here.