Technology Investment Boost due to end 30 June 2023.

Last year the previous Coalition Government announced a Technology Investment Boost as part of the 2022/23 Federal Budget.  The Boost was announced to support eligible small businesses by providing an incentive to invest in their digital capacity.  The incentive was introduced into Parliament in November 2022 and passed the House of Representatives in the same month.  At the time of writing, the Bill was still before the Senate and has not yet been legislated.

This incentive allows eligible businesses to claim an additional 20% deduction for the cost of relevant expenses and depreciating assets.  This means a deduction of 120% of the costs of eligible expenditure can be claimed, with an annual expenditure cap of $100K and the bonus capped at $20K annually.

The 20% boost deduction is only available in relation to eligible expenditure incurred between:

• 7:30pm (ACT time) on 29 March 2022; and

• the end of the income year – 30 June 2023.

Depreciating assets that may be eligible under the initiative must be:

• first used and installed ready for use before 1 July 2023; and

• not subject to a balancing adjustment event (e.g. be sold) before the end of the income year.

Eligible expenditure must be incurred wholly or substantially for the purposes of the business’s digital operations or digitising operations.  Expenditure may include:

Digital enabling items

Computer hardware and equipment; telecommunications hardware and equipment; software; internet costs; systems and services that form and facilitate the use of computer networks (e.g. IT/Helpdesk support fees).

Digital media and marketing

Audio and visual content; web page design and update costs; Search Engine Optimisation (‘SEO’) fees; pay-per-click advertising; email marketing fees; photo stock commissions and music royalty fees used in digital media and marketing.

E-commerce

E-commerce website set-up and optimisation; social media store set-up; online payment method set-up costs; photography costs for online display; photo stock and other royalty fees associated with website costs.

Cyber security

Consultant fees, software, installation and implementation costs of security systems; backup management; monitoring and upgrade services.

It is worth noting that although this legislation has not been passed, if your small business is in the market to invest in digital technologies you must do so (and if applicable, have installed ready for first use) before 30 June 2023 in order to be eligible to claim the 20% boost on eligible technology expenditure in your FY2023 company tax return.

If you have any questions in relation to the boost, whether your business is eligible, types of eligible expenditure and/or more specific information on how and when to claim the boost, please get in touch with us.