Small Business tax breaks: Digital and skills boost in Budget 2022

Technology Investment Boost

To encourage investment in digital technology and on skills and training, Josh Frydenberg has announced in his 2022 federal budget, that small businesses with an annual turnover of less than $50 million will be free to deduct an extra 20% of the cost of workplace expenses that support their digital uptake.

Businesses will be able to claim the ‘bonus’ deduction on up to $100,000 of expenditure a year. The package has been designed to help SMEs grow their capacities in cloud computing, e-invoicing and accounting, with Mr Frydenberg stating that, “every hundred dollars these small businesses spend on digital technologies…will see them get a $120 tax deduction.”

The ‘Technology Investment Boost’ will apply to any purchases made between 7.30pm March 29 2022 and June 30 2023.

Skills and Training Boost

The Treasurer also said that “starting tonight, for every hundred dollars a small business spends on training their employees, they will get a $120 tax deduction”.

Under the Skills and Training Boost, these small businesses can access the bonus 20 per cent deduction for the cost of external training courses delivered to their employees by providers registered in Australia. In-house and on-the-job training is not eligible, nor is money spent training people who are not employees of the business. The courses can be provided in person (only in Australia) or online.

The government says more skilled employees will drive productivity gains for small businesses, attract and retain staff in a labour tight market, and support future growth. This measure applies for training expenditure between March 29 2022 and June 30 2024.

 

Date published 30 Mar 2022