With tax time just around the corner, now is the time to ensure you are taking advantage of the tax boosts and asset write-offs available to your business.
From investment in cyber security defences to tax write-offs for eligible assets, here are three key tax boosts available for your business as we head towards the end of the financial year.
1. The Technology Investment Tax Boost
As discussed in our previous blog, effective March 29th 2022, from 7.30pm, small businesses with an annual turnover of less than $50 million, will be able to claim 120% of the costs spent on new technologies and training courses to upskill staff.
Designed to encourage small businesses to upgrade their digital capabilities and invest in new technologies, the Technology Investment Boost allows businesses to claim "a bonus 20% deduction for the cost of expenses and depreciating assets, such as portable payment devices, cyber security systems, and subscriptions to cloud-based services."
How to claim
For eligible expenditure incurred between 7:30 pm AEDT 29 March 2022 until 30 June 2022:
- claim the expenditure as usual in your 2021–22 tax return, and
- claim the additional 20% bonus deduction for this period in your 2022–23 tax return.
For eligible expenditure incurred from 1 July 2022 until 30 June 2023:
- you can deduct the entire 120% in your 2022–23 tax return.
2. Skills and Training Investment Boost
As an initiative to encourage small businesses to focus on the skills development of their staff, to "become more productive and competitive” the Skills and Training Investment Boost was announced earlier this year, and does not stipulate a limit to the amount of spending that can be deducted against training courses.It does, however, specify that certain rules apply, such as that the course must be run by an external education provider, which needs to be registered in Australia.
Key points to note:
- Applicable to businesses with an annual turnover less than $50 million
- Effective from March 29th 2022, 7.30pm - June 30th 2023
- No annual cap
- $120 tax deduction per $100 spent
- External Education Provider registered in Australia
- In-house and On-the-job training is not eligible
For more information on how to claim, head to the Australian Tax Office website. We also recommend talking to your accountant or financial advisor to learn more about how you can take advantage of the tax boosts available for your business.
3. The Instant Asset Write-Off Scheme
Eligible businesses can still make much-needed investments and write off the depreciation until June 30, 2023.
The Instant Asset Write-Off Scheme aims to bring forward spending on new assets from businesses by allowing them to reduce the amount of tax they pay by claiming the full tax deduction upfront.
What is covered by the instant asset write-off?
The Australian Taxation Office states that the extension of the instant asset write-off scheme allows a deduction for:
- the business portion of the cost of new eligible depreciating assets for businesses with an aggregated turnover under $5 billion or for corporate entities that satisfy the alternative test.
- the business portion of the cost of eligible second-hand assets for businesses with an aggregated turnover under $50 million.
- the balance of a small business pool at the end of each income year in this period for businesses with an aggregated turnover under $10 million.
For more information on the scheme visit the Australian Tax Office website.
How Diamond IT can support your Technology Roadmap
Subject to eligibility advice on what is deductible, Diamond IT may be able to support you directly or with consultative advice around: Cloud Computing and Cyber Security - Systems, Posture, Governance and Training.
As a general guide, we typically recommend that Diamond IT customers have a spare of all critical equipment (such as a spare laptop/PC/switch) on hand.
Our team has significant experience working with a range of customers to ensure their technology strategy and investments are inline with and supporting key business drivers and strategic objectives.
Talk to us today on 1300 307 907 for more information on how we can work together with you on your technology roadmap.
