Small business tax concessions: The Government has introduced a tax incentive to support small businesses

  • WHO – Australian Businesses with an annual turnover of less than AUD $50 million
  • WHY – Adopt cloud digital technologies in Finance
  • WHAT – Small businesses will be able to deduct an additional 20% off the cost of digital business expenses that take advantage of cloud computing.
  • WHEN – Applies to eligible expenditure incurred from 29 March 2022.

Policy detail:

The Government announced that small businesses (with an aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 percent ($100 expenditure will generate a $120 tax deduction) of the cost incurred on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud based services. This measure will apply to eligible expenditures incurred from 7:30 pm (AEDT) on 29 March 2022 until 30 June 2023. An annual cap will apply in each qualifying income year so that expenditures up to $100,000 will be eligible.

Deloittes’s excerpt from federal budget report

A technology investment boost will be introduced to support digital adoption by small businesses. The boost will apply to eligible expenditure incurred from 7.30 pm on Budget night until 30 June 2023. Small and medium businesses (with an aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of the cost incurred on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, eInvoicing, cyber security systems or subscriptions to cloud-based services. An annual cap will apply in each qualifying income year so that expenditures up to $100,000 will be eligible for the boost. The boost for eligible expenditure incurred by 30 June 2022 will be claimed in tax returns for the following income year. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2023 will be included in the income year in which the expenditure is incurred. This measure appears to be in line with the Government’s broader consultation from earlier in 2022 relating to introducing a business eInvoicing right and moving businesses to the digital economy.

Speak to our team to understand which of our cloud solutions, will achieve a substantial improvement in your business processes, whilst strengthening your financial controls. This is an opportunity to remove manual tasks.