The Federal Budget announcement that businesses will be able to claim a 120% deduction for expenditure on training and technology costs seems fantastic on the outside, but what do you need to know?

Our team delve into the finer details.

What was announced?

The 2022-23 Federal Budget announced two ‘Investment Boosts’ available to small businesses with an aggregated annual turnover of less than $50 million. The Skills and Training Boost is intended to apply to expenditure from Budget night, 29 March 2022 until 30 June 2024. The business, however, will not be able to claim the deduction until the 2023 tax return. The Technology Investment Boost is intended to apply to expenditure from Budget night, 29 March 2022 until 30 June 2023.As with the Skills and Training Boost, the additional 20% deduction for eligible expenditure incurred by 30 June 2022 will be claimed in the 2023 tax return.

The Technology Investment Boost 

The Technology Investment Boost is a 120% tax deduction for expenditure incurred by small businesses on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems, or subscriptions to cloud-based services, capped at $100,000 per annum. Do we know the finer details yet? Unfortunately no. With the 2022 Federal Election around the corner we will have to wait and see.

Skills and Training Boost

The Skills and Training Boost is a 120% tax deduction for expenditure incurred by small businesses on external training courses provided to employees. External training courses will need to be provided to employees in Australia or online, and delivered by entities registered in Australia. Again, we anticipate we won’t know the finer details until after the election.

Invested already? 

If the measure becomes law, and the start date of the measure remains the same, we expect that any qualifying expenditure incurred in the 2021-22 financial year will be claimed in your tax return. But, the ‘boost’, the extra 20% will not be claimable until the 2022-23 financial year.

Please reach out to the team at Flux Advisors for a confidential discussion on these new announcements.