How to spend $1 and deduct $1.20?

It is rare that a small business will be able to deduct more than the expenses it has incurred, but that has changed with a particular announcement in the 2023FY budget released by the Australian treasury on March 29^th 2022.

Small Business Technology Investment Boost

The small business technology investment boost allows businesses with an aggregated turnover of less than $50m to deduct $1.20 for every $1 spent on digitisation of their business, subject to certain criteria.

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Eligible Businesses

Eligible businesses must meet the criteria of a small business according to section 328-110 of the ITAA 1997 except that the reference to $10m turnover is replaced with $50m.

Eligible Expenditure

Eligible expenditure is capped at $100,000 per income year and includes:

·       Items that enable digital operation such as computers, telecommunication hardware, software and services that facilitate computer networks

·       Digital media and marketing content such as audio and visual content

·       E-commerce expenses which support digital ordering platform

Period of Expenditure

Purchases must be made between 29 March 2022 and 30 June 2023

How do you claim the Small Business Technology Investment Boost?

The small business technology investment boost is claimed on the 2023FY tax return.

 For help with your 2023FY tax return contact CTK Accounting, based in Wollongong servicing clients all over Australia.

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