Skip to content
Business Company News

Small Business to benefit from staff and digital investment

Chartered Accountants Australia and New Zealand 3 mins read

22 June 2023

SMALL BUSINESS TO BENEFIT FROM STAFF TRAINING AND DIGITAL INVESMENT

Chartered Accountants Australia and New Zealand (CA ANZ) is encouraging small businesses to act now if they want to benefit from a tax incentive to train their employees and digitise their business.

Legislation allowing a small business to deduct 120% of the cost of training their employees and 120% of the cost of digitalising their business passed Federal Parliament yesterday.

“With small businesses facing worker shortages, the incentive to train new and existing staff is a great initiative,” said Susan Franks, CA ANZ Senior Tax Advocate.

“The 120% deduction for training employees will apply in relation to expenditure incurred by a small business from 29 March 2022,” said Ms Franks.

Training boost

“Businesses should be aware however, that they must comply with some simple guidelines to qualify for the deduction and be mindful of the impact of the expenditure on their operations:

  1. You need to train employees – this incentive does not apply to sole traders, partners and independent contractors.
  2. Take care what training you choose – you could end up with a FBT liability if the training is not related to your employee’s role in your business.
  3. ‘In house’ or ‘on the job’ training does not qualify – the training must be provided by a recognised provider and be within the scope of their registration. Credentials can be checked at training.gov.au.
  4. In person training must be undertaken in Australia, but digital training can occur anywhere – and overseas employees can only be trained digitally. 
  5. Consider your cash flow – a business needs to pay for training up front but the deduction for the cost of training will be in your tax return which is usually quite a while later.
  6. Plan ahead – this incentive is only available for a limited time.  You have until 30 June, 2024 to take advantage of it.
  7. If you need help to understand how the new incentive works, contact your Chartered Accountant.

 

Digitalisation boost

“Throughout the pandemic, nearly 9 in 10 Australian businesses adopted new technologies to improve their business continuity.

“With single touch payroll, e-invoicing, and director IDs, small businesses are being asked to do more and more digitally. To encourage digitalisation of small businesses, small businesses can now claim an extra deduction for the cost of digitalising their operations.

“It’s a win for small businesses who’ve already spent money digitalising their business this financial year but for those who haven’t, the window to act is very small. This 120% deduction only passed Federal Parliament yesterday, but small businesses looking to spend money on digitisation, only have until June 30, 2023 to take advantage of the incentive.

“Small businesses should also be aware; they can only claim the 120% deduction to digitise their business for up to a maximum of $100,000 of expenditure.”

CA ANZ tips regarding the digital incentive:

  1. Plan ahead – this incentive is only available for a limited time.  You have until 30 June 2023 to take advantage of it, and you need to ensure that equipment is installed ready for use before then, not just ordered.
  2. Think broadly – this incentive covers not only computers and software systems but also digital media and marketing content and e-commerce expenditure and repairs and maintenance of equipment.
  3. Some costs are excluded – e.g. salary and wages, financing costs, training costs (but don’t forget about the 120% training bonus) and trading stock.
  4. Private use does not count.  Deductions, including the new 120% deduction, can only be claimed for business use. 
  5. Have a digitalisation plan – you need to show that the expenditure is wholly or substantially for the purposes of your digital operations or digitalising your operations.
  6. Consider your cash flow – the business needs to pay for the digitalisation up front but the deduction for the costs will be in your tax return which is usually quite a while later.
  7. If you need help on how the new incentive works, contact your Chartered Accountant.

 

ENDS

 

For more information contact:

AUSTRALIA

Gillian Bowen, Public Affairs Manager Australia

M +61 411 485 421

gillian.bowen@charteredaccountantsanz.com

 

 

About Chartered Accountants Australia and New Zealand

Chartered Accountants Australia and New Zealand represents more than 135,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. Chartered Accountants are known as Difference Makers. The depth and breadth of their expertise helps them to see the big picture and chart the best course of action.

www.charteredaccountantsanz.com

Media

More from this category

  • Business Company News, Finance Investment
  • 20/05/2024
  • 11:02
SenateSHJ

Crises can lead to a 50 per cent drop in share price, new research

80% of listed companies studied experienced a drop in share price during a crisis The average drop in share price was 12% The median earnings per share drop was 100% On average, share prices took 60 days to recover Crises involving casualties saw an average share price drop of 24.4% and a median earnings per share drop of 191% Environmental crises saw an average share price drop of 23.4% and a median earnings per share drop of 222%. Sydney, 20 May 2024 -- New research has highlighted the magnitude of some of the greatest business crises of over 40 years,…

  • Contains:
  • Business Company News, Travel Tourism
  • 20/05/2024
  • 10:28
International Association of Amusement Parks and Attractions (IAAPA)

Asia Pacific ranks as the second fastest-growing market globally for amusement parks and attractions.

Experience the latest innovations and trends – and take a sneak peek into the exciting future – of the global amusement industry at the…

  • Contains:
  • Business Company News, Travel Tourism
  • 20/05/2024
  • 06:30
International Association of Amusement Parks and Attractions (IAAPA)

Australia in the top four locations for attractions and visitor attendance in Asia Pacific, which is the second fastest growing in the world.

Experience the latest innovations and trends – and take a sneak peek into the exciting future – of the global amusement industry at the…

  • Contains:

Media Outreach made fast, easy, simple.

Feature your press release on Medianet's News Hub every time you distribute with Medianet. Pay per release or save with a subscription.