How to Make the Most of Bonus Tax Deductions for Businesses

Small Business Technology Investment Boost

Are your business’s current tech tools helping to streamline processes, remove double handling, and improve the customer experience? It’s likely there’s room for improvement. For many merchants, searching for new tools and software is a task that gets pushed to the end of the to-do list.  

The new Small Business Technology Investment Boost is designed to nudge merchants to spend on digital tools and software — such as portable payment devices, cloud computing, web design, e-invoicing and accounting. It’s been introduced to help future-proof businesses, and has the potential to accelerate growth after a difficult few years of trading.   

With the introduction of this measure, merchants can claim an additional 20 per cent deduction for the cost of expenses and depreciating assets up to a maximum of $100,000 per year. It's a ‘bonus’ deduction because it applies on top of the deductions already available to businesses.

Here’s how it works:

1. Make an eligible purchase
2. Claim the deduction in your next tax return

Any expenses over the $100,000 cap can be claimed as per usual tax processes. The bonus deduction applies to purchases made between 7.30pm on March 29, 2022 and June 30, 2023.

Skills and Training Boost 

The Skills and Training Boost is another measure designed to give small businesses a helping hand by encouraging merchants to train new employees, and upskill existing staff. What that means is that for every $100 eligible businesses spend training employees, they will receive a $120 tax deduction.

It’s a win-win. Giving employees the opportunity to take part in training opens up opportunities to take on more responsibilities and grow their role, creating more value for the businesses that they work for. For businesses, upskilling staff will help to bridge gaps in the workforce and circumvent the sky-high costs to attract and train talent in the face of significant labour shortages.  

What’s the catch? Two conditions have been announced so far. 

1. The training cannot be in-house or on-the-job. It must be provided by an external organisation.
2. Courses can be provided in person, anywhere in Australia, or online — so long as that external organisation is a company registered within Australia.

The Skills and Training Boost came into effect on March 29, 2022 at the same time as the Small Business Technology Investment Boost, and will extend until June 30, 2024.

Both the Small Business Technology Investment Boost and the Skills and Training Boost are available to businesses with an aggregated turnover of less than $50 million a year. More conditions will likely apply when legislation is enacted, so stay tuned.