fbpx
X
Maximising your Tax Deductions with the 20% Training & Technology Boosts

Maximising your Tax Deductions with the 20% Training & Technology Boosts

Although the Government announced these Small Business support measures in March 2022, these two Tax Deduction Boosts have only recently become law.  The Boosts provide an extra 20% tax deduction in your 2023 and/or 2024 tax return for certain expenditure.

20% Training Boost

A Small Business can claim an extra 20% tax deduction for the cost of external training courses delivered to employees by registered training providers if:

  1. The Small business has an aggregated annual turnover of less than $50 million;
  2. This only applies to training for “employees” (so not applicable for non-employee business owners such as sole traders and partners of partnership, or contractors) 
  3. The Training must be provided by an unrelated, “External” training provider (not provided by your team or an associate eg in-house or “on the job”).  It can be in-person or online.
  4. The training provider must have an RTO (registered training organization) number. The following websites can help you clarify if your trainer is registered: www.training.gov.au and www.teqsa.gov.au.
  5. The training expenses must be business related and already tax deductible for your business under normal law provisions (and you still claim the normal tax deduction for the actual cost in the year it was actually incurred).
  6. Expenses incurred between 7:30pm AEDT 29 March 2022 and 30 June 2024;
    • The boost for expenses incurred between 29 March 2022 to 30 June 2023 expenses is claimed in the 2023 Tax Return; and
    • The boost for expenses incurred between 1 July 2023 and 30 June 2024 is claimed in the 2024 Tax Return.
  7. There is no cap on the amount of Boost that can be claimed. 
  8. Travel, meals and accommodation costs will not qualify for the boost unless they are charged to the employer by the training provider. Books, reference materials and equipment that directly relate to the training, are incidental to the course AND included in the fee the employer pays to the training provider would qualify for the boost. 

See ATO for more details: https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/Small-business-skills-and-training-boost/  

 

To help us confirm eligibility of your expenses for this Boost when we are preparing your tax return, please make sure you provide us with copies of the relevant invoice or CPD Certificate showing the RTO number of the provider.  Better still, please include details and attach a copy of the documents to the actual transactions in your Xero or MYOB data file.

 

20% Technology Boost

A Small Business can claim an extra 20% tax deduction for technology expenditure to help support their digital (IT) operations or digitise the business if:

  1. The Small business has an aggregated annual turnover of less than $50 million; 
  2. the expenditure must be incurred wholly or substantially for the purposes of your digital operations or digitising your operations.  
  3. the expenditure must be eligible for a deduction under another provision of the taxation law;
  4. if the expenditure is on a depreciating asset, the asset must be first used or installed ready for use by 30 June 2023.  If asset is being depreciated, the bonus deduction is calculated on asset’s cost. 
  5. Eligible expenditure may include, but is not limited to, business expenditure on: 
    1. digital enabling items – computer and telecommunications hardware and equipment, software, internet costs, systems and services that form and facilitate the use of computer networks
    2. digital media and marketing – audio and visual content that can be created, accessed, stored or viewed on digital devices, including web page design
    3. e-commerce – goods or services supporting digitally ordered or platform-enabled online transactions, portable payment devices, digital inventory management, and advice on digital operations or digitising operations, such as advice about digital tools to support business continuity and growth;
    4. cyber security – cyber security systems, backup management and monitoring services. 
    5. subscriptions to cloud-based services eg Xero and MYOB, Timely etc. See table below for examples.
  6. Applies to expenditure between 7:30pm AEDT 29 March 2022 and 30 June 2023. The boost for all these expenses is claimed in the 2023 Tax Return;
  7. Capped bonus deduction at $20,000 in the 2023 Tax Return for total of 2022 & 2023 expenditure.

See ATO for more details 

Technology investmentExamples
Hardware & EquipmentComputer, laptops, monitors, hard drives, USB sticks, routers, tablets, keyboard, webcam, mouse
Computer software & systemsSoftware licences like Microsoft, Adobe, Google Workplace. Subscriptions to support digital capabilities, IT support fees. Subscriptions to cloud-based services like Xero, MYOB (exclude development of in-house software)
Digital Media and MarketingAudio and visual content fees, web page design/set up costs, search engine optimization fees, email marketing fees
Internet & Network costsInternet costs, server, cloud storage service, domain name
Portable payment devices, eCommerceSquare, digital inventory manager fees, e-Commerce site set up, online payment set up fees. 
Cyber security systems/softwareNorton, MailGuard, cyber security consultant fees, cyber security software installation & implementation cost. Upgrade, backup and monitoring costs.
Repair and improvement costs of depreciating tech assetsNote: as long as incurred during relevant time period.
NO Salary & wagesNO Training & education
NO Capital works (construction/fitout)NO Trading stock
NO Financing costs

To help us confirm eligibility of your expenses for this Boost when we are preparing your tax return, please make sure you provide us with copies of the relevant invoices.  Better still, please include details and attach a copy of the documents to the actual transactions in your Xero or MYOB data file.

 

You might also be interested in...

Previous
Next

Sign up for regular insights