Small Business Tax Incentives: Skills and Training Boost.

The Government is consulting on exposure draft legislation to introduce a Skills and Training Boost to support small businesses to train and upskill their employees resulting in more staff productivity and retention.

What is the Small Business Skills and Training Boost?

The Small Business Skills and Training Boost allows businesses with an aggregated turnover of less than $50 million to claim a bonus 20% deduction on eligible training courses provided to employees. Eligible businesses will be able to claim 120% of the costs as part of budget measures.  Essentially, this means that incurred costs can be deducted from taxable revenue at an amount greater than what was spent. For example, for every $1,000 you spend you will get $1,200 tax deduction.

What can be claimed?

There is no limit on how much spending on training can be deducted by a small business at the bonus rate of 120%, but certain rules apply, such as:

• The course must be run by an external training provider;

• The training provider needs to be registered in Australia;

• Training can be provided in-person or online;

• The tax boost applies for expenditure incurred from 30 March 2022 until 30 June 2024; and

• In-house and on-the-job training is not eligible, nor is money spent training people who are not employees of the business.

How the Small Business Skills and Training Boost can be claimed?

For eligible expenditure incurred between 29 March 2022 until 30 June 2022:

• claim the expenditure as usual in your 2021–22 tax return; and

• claim the additional 20% bonus deduction for this period in your 2022–23 tax return.

For eligible expenditure incurred from 1 July 2022 until 30 June 2023:

• you can deduct the entire 120% in your 2022–23 tax return.

For eligible expenditure incurred from 1 July 2023 until 30 June 2024:

• you can deduct the entire 120% in your 2023–24 tax return.

For more information on how you can claim the boost, please get in touch with us.