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Enhanced Deduction for Skills Training and Technology Expenses

tax deduction and skills training

Are you a small or medium-sized business owner looking to invest in your employees’ skills and leverage technology for growth? We have exciting news for you! A new tax provision allows businesses like yours to claim a 120% deduction for expenses related to skills training and technology investments. Let’s explore the details and see how this can benefit your business.

Overview of the Boosts

The recent budget introduced a proposal to support small and medium businesses. This proposal has become a reality, enabling companies to claim a 120% tax deduction for technology and skills training expenses. It’s a fantastic opportunity to fuel your growth and enhance your business operations.

Timeline and Eligibility for the Boosts

To ensure accessibility, the provision has set some eligibility criteria. If your business has an annual turnover of less than $50 million, you may qualify for this boost. Two types of boosts are available:

The Skills & Training Boost and the Technology Investment Boost.

The Skills and Training Boost covers expenses incurred from March 29, 2022, until June 30, 2024. While the bonus deduction cannot be claimed until the 2023 tax return, it’s an excellent opportunity to invest in your employees’ skills.

The Technology Investment Boost applies to expenses incurred between March 29, 2022, and June 30, 2023. The additional 20% deduction for eligible expenses incurred by June 30, 2022, can be claimed in your 2023 tax return. From July 1, 2022, the boost will be included in the income year when the expenditure is made.

Enhanced Deduction for Technology Investments

In today’s digital age, staying ahead of the curve is essential. The Technology Investment Boost offers a 120% tax deduction for business expenses and depreciating assets contributing to digital adoption. This includes portable payment devices, cybersecurity systems, and subscriptions to cloud-based services. You can claim a maximum deduction of $20,000 per year, with a cap of $100,000. Embrace the digital future and unlock new opportunities for your business.

Enhanced Deductions for Skills and Training

Your team is the backbone of your business, and investing in their skills is investing in your success. With the bonus deduction for skills and training, you can claim a 120% tax deduction for expenses incurred on external training courses for your employees. Whether in-person training or online courses, you’re eligible as long as registered training organizations in Australia deliver them. Empower your team with the knowledge to excel and contribute to your business’s growth.

Examples in Practice

Let’s bring this to life with a couple of examples. Imagine you own AAA Co Pty Ltd, a small business. Recently, you purchased laptops for your employees to work from home, costing $100,000. You can claim the total purchase price of the laptops as a deduction under the temporary full expensing measure. Additionally, you can claim the maximum bonus deduction of $20,000. This deduction impacts your finances and empowers your team to thrive in the modern work environment.

Another story is Cockablue Pets Pty Ltd, a small business operating a veterinary centre. To support the development of a new employee passionate about veterinary nursing, you invested $3,500 in their external training. By meeting the eligibility criteria, you qualified for a bonus deduction of $700. This investment in your employee’s skills will undoubtedly contribute to the quality of service you provide and the success of your business.

Claiming the Deductions

To make the most of this valuable boost, it’s essential to understand the eligibility criteria and guidelines for claiming the deductions. Seeking assistance from professionals experienced in navigating the world of taxes, such as Fullstack, can be beneficial.

Take advantage of this incredible opportunity to invest in your team’s skills and embrace technology for the betterment of your business. It’s time to take advantage of the tax provision and embark on a journey to success. Start fueling your business growth today!

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Stuart Reynolds
is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech companies, crypto and entrepreneurs.

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