Three budget changes to take small businesses into the future

If you are looking to go digital, upskill your employees or attract great talent, there was good news for you in March’s federal budget. Here are three great announcements that you, as a small business, can take advantage of:

Technology Investment Boost

This scheme helps businesses with an annual turnover of less than $50 million to invest in improving their digital capabilities. These businesses are allowed to claim a bonus 20 per cent tax deduction for the cost of these expenses and depreciating assets.

An annual $100,000 cap will apply to each qualifying income year.

Items permitted include portable payment devices, cyber security systems and subscriptions to cloud-based services. But the scheme only applies to items bought on or before 30 June 2023.

The Australian Taxation Office says businesses can continue to deduct expenditure over $100,000 under existing law. They can also continue to deduct expenditure that is ineligible for the bonus deduction under the existing tax law.

The ATO adds that it will provide further details on eligible expenses once the law has passed.

The Skills and Training Boost

This change is aimed at helping small businesses train new staff and upskill existing staff.

Similar to the first boost, small businesses can claim a bonus 20 per cent deduction for the cost of external training courses delivered to their employees in Australia or online by providers registered in Australia. This measure will apply to eligible spending incurred until 30 June 2024.

Employee share schemes

Elsewhere, the government is making changes to employee share schemes (ESS) which will help small companies better compete with overseas and big listed companies for staff with in-demand skills.

Employee share schemes allow companies to gift or sell shares to staff at a discount, or even through loans or salary sacrificing deals. But the “value cap” limits the value of shares that can be issued to non-executive staff to $5,000 a year.

As part of its budget, the government announced it would expand access to ESS and further reduce red tape so that employees at all levels can directly share in the business growth they help to generate.

Where employers make larger offers related to ESS in unlisted companies, participants can now invest up to $30,000 per person each year, accruable for unexercised options for up to five years, plus 70 per cent of dividends and cash bonuses.

Alternatively, they can invest any amount, if it would allow them to immediately take advantage of a planned sale or listing of the company to sell their purchased interests at a profit.

If you are looking to invest in your digital capabilities or employees’ skills, contact us to see how we can help you.

 

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