The 2022-23 federal budget was announced last Tuesday 29 March 2022, with two new incentivise for small businesses with less than $50m aggregated turnover. These incentives focus on increasing the training and skills of employees within Australia, with the training and upskilling boost, and encouraging businesses to move into the digital age, with the technology investment boost.
Training and Upskilling Staff Boost
With focus on developing the skills for staff within Australia, the Government has announced the training and upskilling staff boost incentive for small business with less than $50m aggregated turn over. This boost will see an additional 20% deduction of external staff training. For example, if a business course cost $100 for a staff member, the business would be entitled to a tax deduction of $120.
Key points to consider:
- Effective from the day of the budget announcement (29/03/2022)
- The training must be external. Any inhouse training or training within the company is excluded from this boost.
- The deduction for any training conducted within the 2022 financial year will not be available for deduction until the 2023 tax return. Training conducted in the 2023 & 2024 financial year will have the deduction available within the tax return of the respective year.
Technology Investment Boost
Encouraging movement towards the digital age, it was announced in the budget that a technology investment boost will be available to businesses with less than $50m aggregated turnover. This will see an addition 20% deduction for eligible business expenses and depreciating assets that support digital adaptation.
Key points to consider:
- Effective from the day of the budget announcement (29/03/2022)
- Examples of eligible items are portable payment devices, cyber security systems and cloud-based services. At the present time, the description of eligible items is very vague, we expect a more in-depth outline once the legislation is complete.
- There will be an annual cap for this boost of $100,000
- The deduction for any business expenses within the 2022 financial year will not be available for deduction until the 2023 tax return. Business expenses in the 2023 & 2024 financial year will have the deduction available within the tax return of the respective year.
This is a good opportunity for business wishing to offset the cost of staff training and digitalised work operations against the entity business
Other Measures
Extended support for apprentices or trainees
An employer who takes on an apprentice or trainee up until 30 June 2022 can gain access to:
- 50% of the eligible apprentice or trainee wages in the first year, capped at a maximum payment value of $7,000 per quarter (Maximum 28k in the first year);
- 10% in the 2nd year, capped at $1,500 per quarter (Max $6,000 2nd year);
- 5% in the 3rd year, capped at $750 per quarter (Max $3,000 3rd year).
Should you have any questions regarding these measures, please contact us.
This article was written by Ian Linton and appeared in the April 2022 newsletter
