Why Small and Medium Sized Businesses Should Invest in Training
If you are a small or medium sized business owner in Australia, you may be wondering how to improve your productivity, competitiveness and profitability. One of the best ways to do that is to invest in training and technology for your employees and your business operations. And the good news is that the federal government has announced an incentive for you to do so in the 2022-23 budget.
What is the incentive?
The government has introduced two new measures called the Small Business Technology Investment Boost and the Small Business Skills and Training Boost. These measures allow you to claim an additional 20% tax deduction on top of the existing deduction for eligible spending on technology and training. This means that for every $100 you spend on these items, you will get a $120 tax deduction.
What are the benefits?
By investing in technology and training, you can:
Enhance your digital capabilities and streamline your business processes
Improve your cyber security and protect your data and assets
Increase your customer engagement and satisfaction
Boost your employee skills and retention
Reduce your costs and increase your efficiency
Stay ahead of the competition and adapt to changing market conditions
What are the eligibility criteria?
To qualify for the incentive, you need to meet the following criteria:
You must be a small or medium sized business with an aggregated annual turnover of less than $50 million
You must incur the expenditure between 7:30 pm AEDT 29 March 2022 and 30 June 2023 for technology investments, or 30 June 2024 for training expenses
You must use the technology or training for the purposes of your business operations
You must comply with certain rules regarding the type and provider of the technology or training.
What are some examples of eligible technology and training?
Some examples of eligible technology investments include:
Portable payment devices
Cyber security systems
Cloud computing services
E-invoicing software
Web design tools
Some examples of eligible training expenses include:
Courses on digital skills, such as coding, data analysis, social media marketing, etc.
Courses on business management, such as accounting, finance, leadership, etc.
Courses on industry-specific skills, such as hospitality, retail, manufacturing, etc.
However, there are some limitations and exclusions that apply to both types of spending. For example:
There is an annual cap of $100,000 on technology investments per income year
There is no limit on training expenses per income year, but the course must be run by an external education provider registered in Australia
You cannot claim for spending on software development or website creation
You cannot claim the for spending on internal training or wages of employees who provide or receive training.
For more details on how to claim the incentive and what qualifies as eligible spending, please refer to the Australian Taxation Office website or consult your tax adviser.
How can you get started?
If you are interested in taking advantage of this opportunity, you should act fast as it is only available for a limited time. Here are some steps you can take to get started:
Assess your current technology and training needs and identify any gaps or areas for improvement
Research and compare different options for technology and training providers that suit your budget and goals
Make a plan and a budget for your spending and track your progress
Claim your additional tax deduction when you lodge your tax return.
Investing in technology and training can be one of the best decisions you can make for your business. Not only will it help you save money on tax, but it will also help you grow your business and achieve your potential. Don’t miss this chance to boost your business with the government’s support. Start planning today!
Useful Links
Budget tax breaks for small businesses investing in technology and skills - ABC News