Use Appendix 14 to help you work out if and when you can claim the small business boosts.
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). Small businesses will be able to deduct an additional 20% on top of their ordinary deduction for expenditure they incur in providing eligible external training courses to employees through eligible registered training providers in Australia.
How to complete the trust tax return
You claim the bonus deduction as an expense subtraction at:
- item 5 Reconciliation items, Expense reconciliation adjustments (expense subtractions) (using Worksheet 1)
Do not include the ordinary deduction for expenditure on your skills and training at item 5.
You also write the amount that you claimed at item 5 for the skills and training bonus deduction at:
- item 52 Small business boost.
The additional 20% bonus deduction is on top of your ordinary deduction for the cost of eligible training expenditure incurred between 7:30 pm (AEDT) on 29 March 2022 and 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 a 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 a relative, spouse or partner of a related individual, and
- 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 to claim the bonus deduction
Special rules apply in claiming the bonus deduction for the eligible expenditure. It also depends on the balancing date if the small business has a substituted accounting period.
If you are a normal or late balancing entity, and:
- incurred expenditure between 7:30 pm (AEDT) on 29 March 2022 and the end of your 2022–-23 income year , you claim the bonus deduction at this label 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.
- incur expenditure for 2023–24 income year (up until 30 June 2024), you claim the bonus deduction in respect of this expenditure in the 2023–24 income year.
If you are an early balancing entity, and:
- incurred expenditure between 7:30 pm (AEDT) on 29 March 2022 and the end of your 2022–23 income year, you claim the bonus deduction in respect of this expenditure in the 2023–24 income year.
- incur expenditure for your 2023–24 income year, you claim the bonus deduction in respect of this expenditure in the 2023–24 income year.
- incur expenditure for 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.
Steps to work out the amount to report at items 5 and 52A
Step 1: Enter at the primary production column, your temporary bonus deduction amount for the small business skills and training boost in respect of your primary production business at row x in worksheet 1.
Step 2: Enter at the non-primary production column, your temporary bonus deduction amount for the small business skills and training boost in respect of your non-primary production business at row x in worksheet 1.
Step 3: Add up your amounts at primary production and non-primary production at row x in worksheet 1.
Step 4: Transfer the amounts at row x in worksheet 1 to item 5 Reconciliation items, Expense subtractions. Do not show cents. Also record this amount at item 52A.
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.
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.
You claim the bonus deduction as an expense subtraction at item 5 Reconciliation items, Expense reconciliation adjustments (expense subtractions) (using Worksheet 1).
Do not include your ordinary deduction for expenditure on your technology investment at item 5.
You also write the amount that you claimed at item 5 for the technology investment bonus deduction at item 52 Small business boost.
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 portion of the expenditure that is for business use only.
You can't 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.
If you are claiming the bonus deduction for eligible expenditure incurred in acquiring 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 to claim the bonus deduction
The bonus deduction is available for eligible expenditure incurred between 7:30 pm (AEDT) on 29 March 2022 and 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.
Steps to work out the amount to report at items 5 and 52B
Step 1 Enter at the primary production column, your bonus deduction amount for the small business technology investment boost in respect of your primary production business at row y in worksheet 1.
Step 2 Enter at the non-primary production column, your bonus deduction amount for the small business technology investment boost in respect of your non-primary production business at row y in worksheet 1.
Step 3 Add up your primary production and non-primary production at row y in worksheet 1.
Step 4 Transfer the amount at row y in worksheet 1 to item 5 Reconciliation items, Expense reconciliation adjustments (expense subtractions) do not show cents. Also record this amount at item 52 – label B.
Return to: Appendixes or Instructions to complete the trust tax return