Did you have small business boosts?
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No |
Go to P13 Trade debtors. |
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Yes |
Read on. |
Small business skills and training boost
The small business skills and training boost provides a temporary bonus deduction to small businesses (with aggregated annual turnover of less than $50 million) for expenditure incurred in providing eligible external training courses to employees by eligible registered training providers in Australia.
The bonus deduction is an additional tax deduction of 20%, on top of the business’ ordinary deduction, for eligible expenditure incurred from 7:30 pm (AEDT) on 29 March 2022 to 30 June 2024.
If you are a small business with an aggregated annual turnover of less than $50 million, you must also meet the following criteria for the bonus deduction:
- expenditure must be for training employees, in-person in Australia, or online
- expenditure must be charged, directly or indirectly, by a registered training provider and be for training within the scope of the provider's registration
- the registered training provider must not be the small business or an associate of the small business, for example, a relative, spouse, partner or related entity of the individual in business
- expenditure must already be deductible under the taxation law.
Expenditure for training persons other than employees is not eligible for the bonus deduction. For example, contractors and partners of a partnership are not eligible for the bonus deduction.
When to claim the small business and training skills deductions
Are you an early balancer?
No – For expenditure you incurred from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2022–23 income year, you claim the bonus deduction in the 2022–23 income year. (This means that you claim the bonus deduction for eligible expenditure incurred in both the 2021–22 income year and the 2022–23 income year in your 2022–23 tax return).
For expenditure you incur in the 2023–24 income year (up until 30 June 2024), you claim the bonus deduction in the 2023–24 income year.
Yes – For expenditure you incurred from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2022–23 income year, you claim the bonus deduction in your 2023–24 income year.
For expenditure you incur in your 2023–24 income year, you claim the bonus deduction in your 2023–24 income year.
For expenditure you incur in your 2024–25 income year – up until 30 June 2024 – you claim the bonus deduction in your 2024–25 income year.
Small business technology investment boost
The small business technology investment boost provides a temporary bonus deduction to small businesses (with an aggregated annual turnover of less than $50 million) for eligible expenditure incurred, and depreciating assets acquired, for the purposes of their digital operations or for digitising their operations.
This bonus deduction is an additional tax deduction of 20%, on top of the ordinary deduction, for eligible expenditure incurred from 7:30 pm AEDT on 29 March 2022 to 30 June 2023. It applies to the total of eligible expenditure of up to $100,000 per income year, up to a maximum bonus deduction of $20,000 per income year.
When to claim the small business technology investment deduction
Whether you are a normal, late or early balancer, you can claim up to a maximum bonus deduction of $20,000 per income year or $40,000 for the whole period.
Are you an early balancer?
No – For expenditure you incurred from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2022–23 income year, you claim the bonus deduction in the 2022–23 income year. This means that you claim the bonus deduction for eligible expenditure incurred in both the 2021–22 income year and the 2022–23 income year in your 2022–23 tax return.
Yes – For expenditure you incurred from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2022–23 income year, you claim the bonus deduction in your 2023–24 income year.
For expenditure you incur in your 2023–24 income year (up until 30 June 2023), you claim the bonus deduction in your 2023–24 income year.
Criteria for claiming the small business technology investment deduction
You must meet the following criteria for the bonus deduction:
- The expenditure must be eligible for a deduction under another provision of the tax law.
- If the expenditure is on a depreciating asset, the asset must be first used or installed ready for use by 30 June 2023.
- If the expenditure is on a depreciating asset, the asset is not in-house software allocated to a software development pool.
- The expenditure must be incurred wholly or substantially for the purposes of your digital operations or digitising your operations.
- If the expenditure is for multiple purposes (for example, a mix of private and business use), the bonus deduction will apply only to the proportion of the expenditure that is for business use.
You cannot claim the bonus deduction for expenditure on a depreciating asset if a balancing adjustment event occurs to the asset (for example, you sell it) during the income year in which you hold the asset and incur the expenditure, unless the balancing adjustment event is an involuntary disposal.
Repair and improvement costs for depreciating assets are eligible for the bonus deduction provided that these costs are incurred during the relevant period.
The following types of expenditure are not eligible for the bonus deduction:
- salary and wage costs
- capital works costs which can be deducted under Division 43 of the ITAA 1997
- financing costs
- expenditure that forms part of, or is included in, the cost of trading stock
- training and education costs.
If you are claiming the bonus deduction for eligible expenditure incurred on a depreciating asset, you calculate the bonus as 20% of the asset's cost irrespective of whether you claimed your ordinary deduction for the decline in value of the asset in one income year (under temporary full expensing) or over its effective life (under the uniform capital allowance regime). If you are a small business that uses the simplified depreciation rules, you must use temporary full expensing when claiming your ordinary deduction.
Completing this item
To complete this item, use the amounts you calculated for bonus deductions at question P8 in worksheet 4.
Write at question 12 – label M Small business skills and training boost the total amount you claimed at question P8 for the small business skills and training boost. This is the total amount from row x in worksheet 4.
Write at question 12 – label N Small business technology investment boost the total amount you claimed at question P8 for the small business technology investment boost. This is the total amount from row y in worksheet 4.
Continue to: P13 and P14 Trade debtors and creditors