All Australian small businesses who upgrade their digital skills and technology equipment will receive $1.6 billion in tax relief under a new plan put forth by the 2022 Federal Budget. This plan comes into effect on the 29^th of March 2022.

As a part of their plan for a stronger future, the Technology Investment Boost will increase digital uptake while the Skills and Training Boost will help small businesses to attract, retain and upskill staff.

Technology Investment Boost:

This new package will benefit all Australian businesses with an annual turnover of less than $50 million, and allow for a 20% rebate of the cost of workplace expenses that support their digital uptake. Businesses will be able to claim this bonus deduction on up to $100,000 of expenditure per year.

The package will assist SMEs to grow their capabilities in computing, e-invoicing and accounting, Treasurer Josh Frydenberg said in his budget speech. The boost will apply to expenditure incurred until 30 June 2023.

Skills Training Boost:

Similarly to the Technology Investment Boost, the Skills Training Boost equates to 20% of eligible expenses. This means that if $100 is spent on training employees, the business will benefit from a $120 tax rebate. This boost will apply to eligible expenditure incurred until 30 June 2024.

The measure is projected to result in $550 million in tax relief for participating businesses.

Mr Ord says migrants make up a high proportion of small business owners relative to their population. An estimated 200,000 – 300,000 Chinese operators in Australia are over the age of 50 and less likely to use technology.

“There is a real generation divide … When we speak to people, they don’t know what technology is available and how to apply it in their business.”

The government will also enable companies to choose PAYG instalments calculated based on current financial performance, which they claim will lower tax instalments.

Other measures include an allocation of $5.6 million for a small business unit in the Fair Work Commission designed to make it easier to meet workplace obligations and $8 million for them to seek advice from the Small Business Ombudsman.

There’s also $4.6 million for small businesses to access mental health support and $2.1 million for debt counselling and advice.

Business groups have been longing for tax relief for Australian firms undertaking digital transformation, and claiming such incentives will aid dividends in the long-run. 

I feel that there is a great opportunity for both parties to gain from this timely announcement. On one hand, the small business will gain by savings on the tax front and on the other hand, the individual professionals will get an opportunity to invest in honing their skills to be relevant in the market.

Soon, you will see a lot of training service providers offering various schemes and promote their services. But one needs to be careful in choosing from the buffet of options available in the market. Make sure that your decision to choose your training provider is based on:

• The flexibility of training options

• The width of training solutions

• The quality of course delivery. 

One such training provider that meets all the above is NextTech Learning. It delivers the highest quality training solutions for Australian business professionals, organisations and governments.

To sum-up, its highly encourage all eligible businesses and professionals to understand and take advantage of this great new government initiative.