Latest Budget Tax Breaks Announced:
Wins for Small Businesses Investing in Upskilling, Training & Technology
Are you looking to improve your small business’s performance, equipment, staff skillsets and operations this year? Well, the latest tax breaks announced in the new Federal Budget may help you with this!
We have seen some major wins and substantial tax breaks being awarded to SME’s, specifically in relation to new technologies, upskilling and staff training expenses. Discover more about the new Federal Budget 2022-23 and what it means for your business!
The Treasurer, Josh Frydenberg, announced that small businesses will be able to take advantage of over $1.6 billion in tax relief with the new budget rollouts and the launch of the Technology Investment and Skills and Training Boosts. He also stated that his government had helped small business more than any other, with the company tax rate for small businesses now sitting at 25% from 1 July 2021, the lowest level in 50 years.
A considerable 20% additional tax deduction on small business expenses and depreciating assets that support the adoption of a digital workplace and systems was also presented, as the government steers more businesses to embrace the digital revolution and the growing online economy. These deductions will be capped at a limit of $100,000 of annual expenditure, from March 29, 2022, up until June 30, 2023.
Make the Most out of the Latest Federal Budget Tax Deductions!
Under the recently announced changes, the government will enable eligible businesses (<$50 million annual turnover) to deduct $120 for every $100 they spend on services and assets that support their digital capabilities, encompassing things such as new website design and development costs, existing website upgrades, cloud computing and subscriptions, portable payment devices, e-invoicing, IT security audits and cyber security systems. Business owners are also set to receive a 20% tax break on training, and digital upskilling related expenses.
The Treasurer has stated that this year’s Federal Budget is set to empower small business owners to use technology to grow their businesses, along with the launching of an initiative for small business owners to better respond to cyber security threats. They are set to now receive a 120% tax reduction on staff training expenses and external training course fees, helping their employees and business become more competitive and productive within their industry and niche.
In effect, this will grant businesses a $120 tax break for every $100 spent on training, however, there are strict conditions to this, such as, the courses must be provided to employees in Australia or online & must be delivered by registered Australian training entities. On-the-job and in-house training are not eligible for this reduction. Regarding our particular business offerings, this would apply to the provision of cybersecurity and website launch training.
In relation to IT Leaders’ services, you are able to take advantage of this considerable tax break to cover a range of expenses, including our unlimited managed IT support services, cloud computing solutions, private and public cloud backup, IT disaster recovery and migration options, Microsoft Office 365 solutions and Microsoft 365 Migration services, as well as hardware options. You will also be able to enjoy tax cuts for various Business IT Support & IT Consulting services, Cyber Security Systems, IT security auditing costs, cloud-based applications and phone systems, VoIP telephony and remote workplace solutions.
SucceEd with the Federal Budget 2022-23 latest Technology Investment and Skills & Training Boosts!
This is fantastic and promising news to hear amid the extensive flooding emergencies in South East Queensland and Northern New South Wales as well as the longstanding effects of the COVID-19 pandemic on businesses across the nation. The additional tax deductions will be available for eligible spending incurred between the start of the Treasurer’s budget speech at 7:30pm AEDT on March 29, up until June 30, 2023, for technology investments, and June 30, 2024, for staff training.
As a broad view is being taken in relation to spending, as a small business owner, you will be able to enjoy a generous tax break for your computer hardware expenses, such as laptops, accounting software, portable payment devices and cloud-based services. Additionally, a 120% deduction for the costs incurred in updating your existing website or for getting a brand new website designed can also be claimed too.
Specifically, as a small to medium-sized business, clients will be able to claim substantial tax deductions for a range of services, including, Microsoft 365 migration and cloud computing solutions, VoIP telephony systems, cloud backups, cyber security audits and related IT security staff training, computer equipment & hardware, IT security systems and hosting from IT Leaders.
One important thing for business owners to note is that whilst the government is providing a new, temporary 120% tax break for SME’s that invest in employee training, skills development or new technologies, it will not be further extending the temporary full expensing of equipment investments. This measure was initially introduced during the pandemic to encourage businesses to invest in new equipment, being able to write off the full cost of purchases against their tax in that year, rather than having to claim depreciation over many years.
As the instant tax deduction has not been extended, businesses will have to have installed or be using the new equipment by June 30, 2023, to claim full expensing. The two new measures are expected to cost the government around $550 million and $1 billion, respectively, over the four years of forwarding estimates.
Capitalise on the budget’s business tax breaks with IT Leaders!
The Budget has been generally well-received by many key small business groups and is said to help take the immediate pressure off Australians and help them begin laying the groundwork for a more secure economic future. It has been said to represent a financial and strategic commitment to ensuring that small and family businesses are digitally enabled, resilient and have the support, incentives, skills and training needed to be truly competitive in the marketplace.
As part of a larger plan for a stronger future, these latest tax breaks in the Federal Budget 2022-23 could considerably help your small business elevate to new heights in the coming year. If you need assistance in choosing the right services or solutions to suit your company, don’t hesitate – contact us today to speak with one of our friendly team members who can guide you through the process!
IT Leaders are ready to transform your business’s digital capabilities with our comprehensive range of IT Support & Managed IT Services, IT Consulting, Cloud Computing and Backup Solutions, Hardware upgrade options, VoIP Telephony Systems, Remote Workplace Solutions and Microsoft 365 services! Get in touch with us now!