Small Business Technology Investment Boost

Hello Chasers,

Over the past two financial years, the Australian government offered  a 20% bonus deduction on technology expenditure for small businesses. This meant that for every $100 you spent on eligible technology, you could claim an extra $20.

The boost was available for expenditure incurred between 7:30 pm AEDT on 29 March 2022 and 30 June 2023. It was capped at $100,000 of expenditure per income year, so you could receive a maximum bonus deduction of $20,000 per year.

What is eligible expenditure?

The boost is available for a wide range of technology expenditure, including:

  • Advice about digitising your business
  • Leasing digital equipment
  • Repairs and improvements to eligible assets that aren’t capital works
  • New and ongoing subscription costs for digital services

Eligibility depended on the purpose of the expenditure and its link to digitising the operations of a specific small business. New and ongoing subscription costs also qualify as eligible expenditure if it relates to your digital operations. For example, your ongoing subscription to an accounting software platform (such as Xero) for your business would qualify. Likewise, a new subscription for digital content that is used in developing web content to advertise your business would also be eligible.

How do I know if my expenditure is eligible?

A good rule of thumb is to consider if the small business would have incurred the expense if they didn’t operate digitally. That is, if they hadn’t sought to adopt digital technologies in the running of their business.

For example, the cost of a multifunction printer would not be eligible if it were intended to only make copies of paper documents. However, it would be claimable if being used to convert paper documents for digital use and storage.

What do I need to keep records of?

Businesses should keep explanations of how the expenses relate to digitising their business, as well as accurate records of all their claims. This will help to ensure that they are able to claim the boost correctly.

Please contact our experienced Team on 55612643 if you require clarification or incurred significant expenses in this area and want to maximise your tax deductions.

Have a great day!

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