Use Appendix 10 for instructions and information for claiming the small business boosts.
Small business skills and training boost
The small business skills and training boost provides a temporary bonus deduction to those entities that meet the definition of 'small business entity' (or would meet that definition if the reference to an aggregated annual turnover of less than $10 million was replaced by a reference to $50 million). The bonus deduction is for expenditure that the entity incurs 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 their ordinary deduction, for eligible training expenditure incurred from 7:30 pm (AEDT) on 29 March 2022 to 30 June 2024. It applies to enrolments or arrangements for the provision of training made or entered into at or after 7:30 pm (AEDT) on 29 March 2022.
If you are a small business entity, 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 eligible registered training provider and be for training within the scope of the provider's registration.
- The eligible registered training provider must not be the small business or an associate of the small business, for example, a related entity or individual or relative, spouse or partner of a related individual.
- 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 partner of a partnership are not eligible for the bonus deduction.
When the bonus deduction is claimed
Special rules apply in claiming the bonus deduction for the eligible expenditure. When you claim the bonus deduction also depends on your balancing date if the small business has a substituted accounting period.
When the bonus deduction is claimed (unless you are an early balancer):
- if you incurred the expenditure from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2022–23 income year, you claim the bonus deduction in respect to this expenditure 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
- if you incur expenditure for 2023–24 income year (up until 30 June 2024), you claim the bonus deduction in respect to this expenditure in the 2023–24 income year.
When the bonus deduction is claimed if you are an early balancer with a SAP:
- if you incurred expenditure from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2022–23 income year, you claim the bonus deduction in respect of this expenditure in the 2023–24 income year.
- if you incur expenditure in your 2023–24 income year, you claim the bonus deduction in respect of this expenditure in the 2023–24 income year.
- if you incur expenditure in your 2024–25 income year (up until 30 June 2024), you claim the bonus deduction in respect of this expenditure in the 2024–25 income year.
The ordinary deduction for eligible skills and training expenditure is claimable under the usual rules in the income year in which the expenditure is incurred.
Small business technology investment boost
The small business technology investment boost provides a temporary bonus deduction to those entities that meet the definition of 'small business entity' (or would meet that definition if the reference to an aggregated annual turnover of less than $10 million was replaced by a reference to $50 million). The bonus deduction is for eligible expenditure incurred, and depreciating assets acquired, for the purposes of their digital operations or digitising their operations.
The 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.
Certain caps apply to the amount that you can claim as a bonus deduction depending on your balancing date if you have a substituted accounting period.
If you are not an early balancer:
- you can claim up to a maximum of $20,000 on eligible expenditure of up to $100,000 for the period from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2021–22 income year, and
- you can claim up to a maximum of $20,000 on eligible expenditure of up to $100,000 for the period from the start of your 2022-23 year to 30 June 2023.
If you are an early balancer:
- you can claim up to a maximum of $20,000 on eligible expenditure of up to $100,000 for the period from 7:30 pm (AEDT) on 29 March 2022 to the end of your 2022–23 income year, and
- you can claim up to a maximum of $20,000 for eligible expenditure of up to $100,000 for the period from the start of your 2023-24 income year to 30 June 2023.
The cap on the bonus deduction works on a cumulative basis in respect of the eligible expenditure.
Criteria for claiming the bonus deduction
You must also meet the following criteria for the bonus deduction:
- The expenditure must be eligible for a deduction under another provision of the taxation 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 to the proportion of the expenditure that is for business use only.
You cannot claim the bonus deduction for expenditure on a depreciating asset if any balancing adjustment event occurs to the asset (for example, it is sold) during the income year in which you hold the asset and incur the eligible expenditure, unless the balancing adjustment event is an involuntary disposal.
Repair and improvement costs for depreciating assets are eligible for the boost 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.
Repair and improvement costs for depreciating assets are eligible for the bonus deduction provided that these costs are incurred during the relevant time period.
If you are claiming the bonus deduction for eligible expenditure incurred on a depreciating asset that is used, or installed ready for use, for a taxable purpose before 1 July 2023, 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 using temporary full expensing or the uniform capital allowance regime in the relevant income year. If you are a small business that uses the simplified depreciation rules, you must use temporary full expensing when claiming your ordinary deduction.
When the bonus deduction is claimed
The bonus deduction is available for eligible expenditure incurred from 7:30 pm (AEDT) on 29 March 2022 to 30 June 2023.
For the purposes of calculating and claiming the bonus deduction, if you are a normal or late balancer, and incurred expenditure from 7:30 pm AEDT on 29 March 2022 and to the end of 2022–23, you claim the bonus deduction in your 2022–23 income tax return.
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.
If you are an early balancer:
- lodging for 2022–23 income year, do not claim the bonus deduction
- lodging for 2023–24 income year, and
- incurred expenditure from 7:30 pm AEDT on 29 March 2022 to the end of your 2022–23 income year, you claim the bonus deduction for that expenditure in 2023–24
- incur expenditure in your 2023–24 income year (up until 30 June 2023), you claim the bonus deduction for that expenditure in 2023–24.
Whether you are a normal, late or early balancer, you can claim up to a maximum bonus deduction of $20,000 for each time period meaning up to a maximum of $40,000 for the period from 7:30 pm (AEDT) on 29 March 2022 to 30 June 2023.
The ordinary deduction for eligible technology investment expenditure is claimable (under the usual rules) in the income year in which it is incurred, and for depreciating assets, when the asset is first used or installed ready for use.
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