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If your business meets the standard aggregated annual turnover rules (with an increased $50 million threshold), you may be eligible to claim an additional 20% tax deduction under the:
Small business skills and training boost
The small business skills and training boost applies to eligible expenditure incurred from 7:30 pm AEDT on 29 March 2022 until 30 June 2024. The expenditure must be for the provision of external training courses delivered to your employees by registered training providers.
Small business technology investment boost
The small business technology investment boost applies to eligible expenditure incurred between 7:30 pm AEDT on 29 March 2022 and 30 June 2023. The boost is for business expenses and depreciating assets to help digitise your small business. It is capped at $100,000 of expenditure per income year. You can receive a maximum bonus deduction of $20,000 per income year.
How to get it right
We are seeing some small businesses incorrectly claim the boost measures due to errors or misunderstanding of the law.
If you claimed either boost measure and believe you don’t meet the eligibility criteria or have made an error, we encourage you to amend your tax return.
If you incorrectly claim, we may get in contact with you or your tax professional. If no action is taken, we may conduct a review and audit of your business.
See how to avoid errors and claim correctly for the:
Skills and training boost
The errors we are seeing some small businesses make when claiming the skills and training boost include:
- claiming when you are not in business, or your aggregated turnover is over $50 million
- claiming for training where the person is not an employee of your business
- sole traders claiming the boost deduction for expenditure on training for themselves
- claiming more than the additional 20% deduction for eligible employee training expenditure
- claiming when training is not provided by a registered training provider.
If you are planning on claiming, ensure you meet the skills and training boost eligibility criteria, and check:
- it’s for an expense that was incurred between 7:30 pm AEDT on 29 March 2022 and 30 June 2024
- it’s for expenditure with a registered external training provider that is not you or an associate of yours
- it’s for the provision of training to employees of your business, either in-person in Australia, or online
- where you are a sole trader, the training is for your employees not yourself
- the training is already deductible for your business.
Example: claiming skills and training boost
Maya and Jackson are directors and shareholders of Sports Academy Pty Ltd. The company has no employees.
Sports Academy Pty Ltd spend $6,240 on a bookkeeping training course with a registered training provider for Maya. Sports Academy Pty Ltd claim a 20% ($1,248) skills and training boost deduction on its 2022–23 company tax return.
However, because Maya is not an employee of the company, Sports Academy Pty Ltd is not eligible to claim the skills & training boost deduction. The deduction they claimed is disallowed.
Sports Academy Pty Ltd must amend their company tax return to exclude the skills and training boost deduction. This adjustment increases the company’s taxable income, leading to a higher tax liability for the 2023 income year.
Sports Academy Pty Ltd lodge an amended company tax return. It reflects the corrected taxable income. They later receive a notice of assessment, which shows an adjusted tax liability for the 2023 income year.
End of exampleTechnology investment boost
The errors we are seeing some small businesses make when claiming the technology investment boost include:
- expenses not meeting definition of eligible digital expenditure
- exceeding annual turnover threshold requirement
- claims exceeding the cap on expenditure
- claims by businesses with no reported depreciating assets
- incorrectly claiming over multiple years.
If you are planning on claiming, ensure you meet the technology investment boost eligibility criteria, and check:
- it’s for an expense that was incurred between 7:30 pm AEDT on 29 March 2022 and 30 June 2023.
- it’s for expenditure of business expenses or depreciating assets (or both) to help digitise your small business
- the expense is already deductible for your business.
Example: claiming technology investment boost
Sami, Omar and Leila are directors of a private company. It supplies pharmaceutical products to retailers and other businesses.
In May 2022 the directors of Pharmacy Supplies Pty Ltd decide to:
- purchase an electronic point-of-sale system and accounting software, at a cost of $30,000. This is to improve record keeping and better understand their business. It will be used from 1 July 2022
- invest in a cyber security system and plan from 1 July 2022 to move to a digital record keeping system. It will cost $40,000 to start and $5,000 a year for updates and maintenance
- modernise their website and implement a mobile app, which will go live in September 2022, at a cost of $40,000.
Pharmacy Supplies Pty Ltd has spent $110,000 on eligible costs in the 2023 income year. Pharmacy Supplies Pty Ltd claims a $22,000 tech investment boost deduction for 2022–23.
However, due to the $100,000 cap on eligible business expenses and depreciating assets, or $20,000 per income year, Pharmacy Supplies Pty Ltd has incorrectly claimed $2,000 more than allowed.
Pharmacy Supplies Pty Ltd must amend its 2022–23 company tax return. It must reduce the technology investment boost deduction. This adjustment increases the company’s taxable income, leading to a higher tax liability for the 2023 income year.
Pharmacy Supplies Pty Ltd lodges an amended company tax return, reflecting the corrected taxable income. They later receive a notice of assessment, which shows an adjusted tax liability for the 2023 income year.
End of exampleKeep up to date
Learn more by taking our free self-paced online courses at:
- Claiming small business tax deductionsExternal Link
- Essentials to strengthen your small businessExternal Link
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- Contact your tax professional to obtain advice specific to your business needs.