Small Business Skills Training Boost

The 2022 Budget contained a Small Business Skills and Training Boost and a Small Business Technology Investment Boost which will be relevant for Mi Members and Students.

Small Business – skills and training boost

  From the budget papers:

The Government is introducing a skills and training boost to support small businesses to train and upskill their employees. The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2024. Small businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 per cent of expenditure incurred on external training courses provided to their employees. The external training courses will need to be provided to employees in Australia or online, and delivered by entities registered in Australia. Some exclusions will apply, such as for in-house or on-the-job training and expenditure on external training courses for persons other than employees. 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 2024, will be included in the income year in which the expenditure is incurred.

What this means for you if you have a business and are paying for staff training.

For every hundred dollars a small business spends on training their employees, they will get a $120 tax deduction. The Treasurer, Josh Frydenberg told Parliament in his budget speech.

  This provision has the potential to allow a 20% boost payment on new and existing student fees which are paid after the 29th March 2022. We need to clarify how this impacts on non corporate sole traders or partnerships.  Further detail will need to be followed up. Also whether the government restricts the training providers further than the current restriction that the training must be provided by Australian registered training providers. 

Students intending to work in their own practice might wish to consider obtaining their ABN and business name now, and establishing their email and digital presence (see information about the technology boost below) by securing their their web site now –  your business starts long before the first paying customer. Paul Kenna Law Mediation Institute .

Small Business – technology investment boost

  This boost may also be of interest to Mi Members and Students. Again from the budget papers this is the information provided.

The Government is introducing a technology investment boost to support digital adoption by small businesses. The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2023. Small businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 per cent 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. An annual cap will apply in each qualifying income year so that expenditure 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.

Similar to training boost we don’t have a lot of detail yet about what is and isn’t included so speak with your tax advisers before committing to a course of action but it looks like you will be able to claim on your tax 20% more than the eligible expenses on some of the costs associated with establishing, expanding or securing your digital presence.  It is possible expenses such as new laptops and websites would be included.

Sole Traders Establishing your Small Business

If you are training to be a mediator is part of your plans to move from being an employee to a small business owner it would be advisable to seek financial advice regarding eligibility as a sole trader. It may be that the government doesn’t intend to support sole traders with this package but the detail is not available as yet.

What else do you need to know?

Legislation is needed for both packages to come into effect and with an election looming they are not a sure thing. That seems to be why the 20% bonus on expenses incurred between now and the end of this financial year can only be claimed in the 2022 -2023 tax year. This is a link to the information currently available on the Australian Taxation Office Website – https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Small-Business-Technology-Investment-Boost-and-Small-Business-Skills-and-Training-Boost/