In the 2022 federal budget, the government announced a $1 billion package designed to assist small businesses with digitising their processes and operations. Small business owners are overjoyed with the announcement as new measures will enable businesses to claim a $120 deduction on every $100 spent on depreciating assets that support digital adoption.
The Government is encouraging small businesses to invest further in their digital resources, broadening their business and digital abilities.
Treasurer Frydenberg indicated the investment boost would assist with cutting the cost of small businesses going digital. “We are backing small businesses that are embracing the digital revolution,” Frydenberg says.
What You Should Know About the Technology Boost
Under the proposed technology boost, small businesses with an annual turnover of less than $50 million may be eligible to receive a bonus 20 percent deduction for eligible expenditure on supporting digital adoption.
When it comes to taking advantage of the technology boost, the following examples of expenditure qualify:
- Cyber Security systems
- Subscription to Cloud-based services
- Website design & development
- Portable payment devices
- New hardware, including monitors, keyboards, webcams, etc.
- Digital images for marketing purposes
The following kinds of expenditure are specifically excluded from this boost:
- Salary or wage costs
- Capital works costs that are deductible under Division 43 of the Income Tax Assessment Act 1997
- Financing costs, including interest, payments in interest, and expenses of borrowing
- Training or education costs
- Expenditure incurred that forms part of or is included in, the cost of trading stock
Any digital expenses made between 7:30 pm AEDT 29 March 2022 until 30 June 2023, claim the expenditure in your 2021–22 tax return and claim the additional 120% bonus deduction for this period in your 2022–23 tax return.
The change was announced alongside a 20 percent bonus deduction for small business spending on training staff and comes after the government previously extended its instant asset write-off scheme for small businesses until June 2023.
What Other Incentives Are Available
Are you looking to upskill within your small business? In support of providing further business and skills growth, the government also launched a plan where small businesses can access another 20 percent bonus deduction for eligible external training courses for upskilling employees.
The Skills and Training Boost will apply to expenditures incurred up until 30 June 2024, providing $550 million in tax relief. “Small and family businesses are at the heart of our economy and local communities. They employ nearly eight million Australians,” treasurer Josh Frydenberg said during the Budget.
Mr. Frydenberg, who has also promoted a digital economy strategy, said the measures were aimed at helping businesses become more productive and competitive.
What You Need to Know Before You Start Digitising
To get the most out of the incentives, it is important to create a clear plan for your small business. This starts with understanding how your business can use things such as cloud-based services, and how cyber security will best benefit you.
With cybercrime on the rise, businesses are being left vulnerable due to a lack of understanding of how cybersecurity can benefit their small business. With that in mind, we have created a datasheet to help communicate how cybersecurity solutions can give you the right protection for your business. Plus, with this new investment boost, there is no better time to take advantage and get protected.
Assistance for Small Business
We believe that all businesses should have access to the latest technology and strive to make transitioning to cloud computing and cyber security as straightforward as possible. Unlike other technology specialists, Lucid takes a unique approach to client services. We cut out the conventional ‘tech talk’ and instead, function as your personal IT support technician, explaining services in a way to which all business owners and staff can relate to.
We have created effective steps for businesses of all sizes to transition to digital success.
Please do not hesitate to contact us to discuss how your business can capitalise on these Federal Budget wins.