Small business owners (with an annual turnover under $50 million) should consider the following tax deductions if you are planning to invest in skills and training or improving your energy efficiency. Each measure will lend a hand with an extra 20% tax deduction for relevant expenses, as outlined below.
The tax deductions explained
1. Small Business Energy Incentive:
While this incentive isn’t official yet (the bill is still before Parliament), when it does become law, it will offer a 20% deduction for eligible energy-related expenses. Up to $100,000 of total expenditure will be eligible for the incentive.
The Energy Incentive is about promoting electrification and energy-efficiencies in small businesses, including investments such as:
- installing batteries or heat pumps
- upgrading to more efficient equipment (for example, energy efficient fridges or water pumps)
- electrifying heating and cooling systems
Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. So, if you are intending to invest in this area, it’s worth considering the potential to claim this deduction. By the time the bill passes parliament there may be little time to plan your expenditure and installation, so start thinking about it now.
2. Small Business Skills and Training Boost:
This measure helps you develop your team’s skills.
You can get an additional 20% deduction for investing in external training courses. The training must be:
- either in-person in Australia, or online
- provided by registered trainers
Note that the Skills and Training Boost applies for eligible expenditure incurred from 29 March 2022 to 30 June 2024.
You can check registered training providers at:
What next?
Both measures offer an additional 20% tax deduction on eligible expenses. If you are intending to invest in skills and training or improving your energy efficiency, it is crucial to understand how these work and when you can apply.
To discuss how your business can benefit from these measures, contact a Synectic adviser today.
