Small Business Skills and Training Boost
Legislation was passed on 23 June 2023 to enable small businesses to claim an additional 20% deduction for expenditure on staff training.
What is the boost?
Small businesses (who have an aggregated turnover of less than $50 million) will receive an additional 20% deduction for expenditure on external training courses delivered to employees by registered training providers.
The additional deduction will apply to expenditure incurred between 29 March 2022 to 30 June 2024.
To be eligible for the additional deduction, you must meet the following conditions:
- You have an aggregated turnover of less than $50 million for the income year in which you incur the expenditure;
- The training is provided to employees of your business (the boost does not apply to training provided to sole traders, partners in a partnership or independent contractors);
- The training is provided either in-person in Australia or online;
- The training is provided by a registered training organisation that is not you or an associate of yours – you can check here for registered providers: https://training.gov.au/
- The expenditure is deductible for your business under Australian tax law;
- The expenditure has been incurred between 29 March 2022 and 30 June 2024.
Expenses you can claim
The boost applies to expenditure on training and also incidental costs (for example: books or equipment).
When do you claim the deduction
For any expenditure incurred between 30 March 2022 and 30 June 2022, you claim 100% of the deduction in the 2022 tax return and the 20% bonus in the 2023 tax return.
For any expenditure incurred between 1 July 2022 and 30 June 2023, you claim both the 100% deduction and the 20% bonus in the 2023 tax return.
For any expenditure incurred between 1 July 2023 and 30 June 2024, you claim both the 100% deduction and the 20% bonus in the 2024 tax return.
What do you need to do?
To check your eligibility for the boost, we recommend you take the following steps:
1. Review your training expenditure from 29 March 2022 to 30 June 2023;
2. Identify any expenditure that has been provided by a registered training provider (refer: https://training.gov.au/)
3. If you use online accounting software, attach a copy of the invoice to the transaction in your software.
4. Provide us (your accountant) with the details of all relevant training costs incurred that meet the eligibility criteria.
Provided we have the relevant documentation to prove eligibility to the boost, we will claim the additional 20% deduction in your tax return.
Please do not hesitate to contact us if you would like further information about the boost.
DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.
Jeanette has over 20 years experience as an accountant in public practice. She is a Chartered Accountant, registered tax agent and accredited SMSF Association advisor. When she is not helping business owners grow their empires, you will likely find her out running on the trails or lifting weights in her local CrossFit gym. Book in to see Jeanette today.