Be it to gain a competitive advantage, fill a skills-gap, or support employees along their evolving career paths, upskilling is now considered a priority of business management. Equally important is the need to stay on top of business technology.

So, to encourage Australian small businesses to upskill their workforce, and invest in digitisation, the Federal Government has passed two pieces of legislation: the Skills and Training Boost; and the Technology Investment Boost.

It’s offering the incentive of an additional 20% deduction to expenditure incurred in either skilling staff or moving to digitise operations. Here’s how the two schemes work:

Small Business Technology Investment Boost

Eligibility is based on:

• a small business with a turnover of less than $50 million
• a $100,000 cap on expenditure for each qualifying year
• expenditure incurred from 7.30pm on 29 March 2022 until 30 June 2023
• the deduction being claimed as part of a 2023 income tax return

Eligible expenditure in this case comprises expenses incurred for the purpose of business digital operations, or for a business digitising operations on business expenses and depreciating assets. That includes portable payment devices, cyber security systems or subscriptions to cloud-based services.

Small Business Skills and Training Boost

Small businesses will also be able to deduct a further 20% of expenditure that is incurred in providing eligible external training courses to their employees by registered Australian providers.

Eligibility applies:

• to small businesses with a turnover of less than $50 million
• there is no cap on expenditure for qualifying years
• for expenditure incurred from 7.30pm on the 29 March 2022 until 30 June 2024
• for deductions claimed as part of 2023 and 2024 income tax returns

In this case the eligible expenditure must be:

• to provide training to employees of a business (in-person within Australia, or online)
• charged directly or indirectly by a registered external training provider not associated with the business
• already deductible for the business under taxation law

Training expenses can include incidentals, such as the cost of textbooks or any training equipment that is required for the course.

The Australian Government provides a national register of vocational education and training (VET) providers online at training.gov.au, to help source appropriate training organisations.

Hall Browns will review our small business clients’ information to help identify opportunities to take advantage of these bonus deductions.

However, if you are already aware of appropriate expenditure incurred by your business, please advise our office, so that it can be claimed as part of your tax return.   

If you are unsure if an expenditure qualifies, please contact us on 07 3831 1055 or [email protected] so that we can discuss the bonus deductions in more detail.