Boost Your Small Business with the ATO Small Business Technology Investment Boost

Is your small business ready to embrace the digital age? The Australian Taxation Office (ATO) is here to support you with the Small Business Technology Investment Boost. This initiative allows eligible small businesses to claim an additional 20% tax deduction to enhance their digital operations.

Who is eligible?

To take advantage of the Small Business Technology Investment Boost, your small business needs to meet the following criteria:

1. Be a small business entity with an aggregated annual turnover of less than $50 million.
2. Incur eligible expenditure between 7:30 pm AEDT on 29 March 2022 and 30 June 2023.

What can you claim?

The boost covers a wide range of digital assets and expenses that can benefit your small business, including:

1. Digital enabling items: Computers, telecommunications hardware, software, internet costs, and computer networks.
2. Digital media and marketing: Audio and visual content accessible on digital devices, web page design, and e-commerce support.
3. E-commerce tools: Portable payment devices, digital inventory management, cloud-based services, and advice on digital operations.
4. Cybersecurity: Cybersecurity systems, backup management, and monitoring services.

It’s important to note that the bonus deduction can only be applied to the business-related portion of the expense, and there may be fringe benefits tax (FBT) consequences associated with the incurred expenditure.

What is the cap?

The boost allows for a maximum bonus deduction of $20,000 per income year, capped at $100,000 of expenditure per year.

How to claim the boost

You can claim the boost by including the eligible expenses in your tax return for the income year in which they were incurred.

Depending on your income year and when the expenses were incurred, you may need to claim the 20% bonus deduction in a later year’s tax return. For most businesses, this will mean that the bonus deduction is included in the 2023 Income Tax Return.

Why should you take advantage of the boost?

Unfortunately the Small Business Technology Investment Boost was only made law on 26 June 2023 which didn’t give businesses much time to take advantage of it! However, for existing eligible expenditures it means a bonus tax deduction!

The Small Business Technology Investment Boost offers significant benefits for your small business:

1. Enhanced efficiency: Embracing digital tools allows you to automate tasks, streamline workflows, and increase overall operational efficiency.

2. Cost savings: The additional tax deduction can reduce your taxable income, resulting in lower tax liabilities.

3. Improved customer service: Digital solutions enable better communication, collaboration, and data sharing with your customers, leading to improved satisfaction and retention.

4. Competitive advantage: Embracing technology gives you a competitive edge over competitors who have not yet invested in digital solutions.

5. Future readiness: Investing in technology today prepares your small business for future advancements and industry changes, ensuring your relevance and success in the long run.

Don’t miss out on the opportunity to boost your small business’s digital capabilities. Take advantage of the ATO Small Business Technology Investment Boost and propel your business into the digital era.