The 120% technology and skills ‘boost’ deduction

The 120% technology and skills ‘boost’ deduction, effective from July 19, 2023, has been sanctioned by Parliament, offering advantageous outcomes for small and medium businesses (SMEs). This article will outlines how you can enhance your deductions within this framework.

Tax Deduction for SMEs on Tech & Training Now Law

Almost a year since the announcement in the 2022-23 Federal Budget, the 120% tax deduction for SMEs on technology expenses, skills training for staff, or digital operations has officially become law. However, there are time-related complexities associated with this deduction. To qualify for the technology investment boost, the technology must have been procured by 30th June 2023, or eligible assets must have been installed and ready for use by that date—just seven days after the legislation was passed.

Who’s Eligible For the Boost?

Small business entities (individual sole traders, partnerships, companies, or trading trusts) with an aggregated annual turnover of less than $50 million can access the 120% skills and training and technology boosts. Aggregated turnover includes the turnover of your business as well as that of your affiliates and connected entities.

$20k Technology Investment Boost

The Technology Investment Boost allows SMEs to claim additional deductions for expenses and depreciating assets related to digital operations or digitization between 7:30 pm (AEST) on 29th March 2022 and 30th June 2023.

The Skills & Training Boost

The Skills and Training Boost provides a 120% tax deduction for external training courses provided to employees. Its objective is to assist SMEs in expanding their workforce by hiring less-skilled employees and upskilling them through external training, enhancing productivity and skills development.

Need to know more?

To ensure a smooth tax season in 2023, book your appointment with HJC Accounting & Financial Advisers. If you require general advice or guidance, speak with one of our tax accountants or financial planners, and let us alleviate your tax-related anxieties.

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