Valuable Tax Deduction Opportunity for Small Businesses
25 October 2023
Are you a small business owner with an annual turnover of less than $50 million? Great news! You might be eligible for a 20% bonus deduction on eligible training expenses for your employees. Here's what you need to know:
What is the Small Business Skills and Training Boost?
- Small businesses can now claim an extra 20% tax deduction on top of their usual deductions for certain employee training expenses.
- This applies to costs incurred from 7:30 pm AEDT on 29 March 2022 until 30 June 2024.
Are You Eligible?
- Your business must have an aggregated annual turnover of less than $50 million.
- Training must be for employees (not business owners or independent contractors).
- Courses must be provided by registered training providers and already tax-deductible.
- Expenses must be incurred within the specified period.
What Can You Claim?
- Costs of external training courses for your employees provided by registered training providers.
- Incidental costs, such as books and equipment needed for the course, if charged by the training provider.
Exclusions:
- Training for non-employee business owners or independent contractors is not covered.
- Costs added by intermediaries, such as commissions or fees, are not deductible under this boost.
Special Note for R&D:
- Businesses claiming under the R&D tax incentive program can still claim the bonus deduction without affecting their R&D claims.
When Can You Claim?
- Deductions are generally claimed in the year expenses are incurred.
- For expenses from 7:30 pm AEDT 29 March 2022 to 30 June 2022, claim the full deduction in your 2021–22 return, and the 20% bonus in your 2022–23 return.
- For expenses incurred in the 2022–23 and 2023–24 income years, claim both the regular and bonus deductions in the respective year's return.
FBT Reminder:
- Keep in mind the potential Fringe Benefits Tax (FBT) consequences associated with training expenditure.
Action Needed:
- Ensure you're choosing eligible training providers.
- Keep detailed records of all relevant expenses.
Don't miss out on this valuable opportunity to invest in your employees' development while also receiving a tax benefit! Contact us today, and we can help you navigate the specifics and maximise your claims under this new initiative.
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