It’s no secret that small businesses have been doing it tough over the past two years. With ongoing lockdowns and restrictions in place throughout 2020 and 2021 due the COVID-19 pandemic, many small businesses have been on the brink of collapse.
However, the Federal Budget 2022, which was delivered on Tuesday March 29, has detailed some relief for small businesses, particularly those who are looking to invest in new technologies and training courses to upskill staff.
Here’s what is on offer:
Technology Investment Boost and staff training courses
Small businesses that spend money on either new technologies or training courses for Australian employees will be able to claim 120 per cent of the costs as tax deductions. It’s estimated that there are about 3.6m businesses with an annual turnover of less than $50m so these businesses are now able to deduct these expenses from their taxable revenue at an amount 20 per cent greater than what was actually spent.
The Technology Investment Boost applies to portable payment devices, cybersecurity systems and subscriptions to cloud-based services. However, there is an annual cap of $100,000 and a deadline, with the initiative set to last until June 30 next year.
In his budget speech, the Treasurer of Australia, Josh Frydenberg, said he was hoping to see small businesses ‘embracing the digital revolution’. “Every hundred dollars these small businesses spend on digital technologies like cloud computing, e-invoicing, cybersecurity and web design will see them get a $120 tax deduction,” he said.
Deductions for the cost of training courses for new or existing staff will remain until June 30, 2024.
Export support
The Budget also confirmed that will be $80 million over four years to provide extra support for small and medium export businesses to re-establish their presence in overseas markets through the Export Market Development Grants program.
Cash flow support
The Gross domestic product (GDP) uplift rate that applies to PAYG income tax and GST instalments will be reduced to two per cent for the 2022-23 income year.
This will ultimately mean lower tax instalments, delivering $1.85 billion in cash flow support for 2.3 million small to medium businesses and sole traders.
Debt help
The Government also committed $2.1 million for Financial Counselling Australia’s Small Business Debt Helpline. The aim is to make it easier for small business owners to receive financial advice when they notice mounting debt.
Mental health support
The Federal Government allocated $4.6 million over two years from 2021-22 to support the New Access for Small Business Owners program delivered by Beyond Blue to continue to provide free and accessible mental health support to small business owners.
Want to know more about this year’s budget and what your small business is entitled to? Book a free consultation with us.
