A Look at the Federal Budget 2022-23: Implications for Small & Medium Businesses
Are you looking to improve your small business’s performance, hardware, staff skillsets and operations this year? Well, the latest budget tax breaks announced in the new 2022 Federal Budget may actually help you with this!
We have seen some major wins and substantial tax deductions being awarded to SME’s, specifically in relation to the adoption of new technologies, digital spending, staff training expenses and upskilling. Keep reading on to find out more about the new 2022-2023 Federal Budget and what it means for your business!
The Treasurer, Josh Frydenberg, announced that small businesses will be able to take advantage of over $1.6 billion in tax relief with the new budget tax breaks, major rollouts and the launch of the Technology Investment and Skills and Training Boosts. He also stated that his government had helped small businesses more than any other to date, with the company tax rate for small businesses now sitting at 25% from 1 July 2021, the lowest level in 50 years.
A considerable 20% additional tax deduction on small business expenses and depreciating assets that support the adoption of a digital workplace and systems was also presented, as the Government steers more businesses to embrace the digital revolution and the growing online economy. These deductions will be capped at a limit of $100,000 of annual expenditure, from March 29, 2022, up until June 30, 2023. These recent Federal Budget announcements mark the introduction of major budget tax breaks for small to medium-sized businesses across all industries in Australia and iOnline is here to help you make the most of them for your company, no matter its size or sector!
Making the Most out of the Latest Budget Tax Breaks!
Under the recently announced changes, the Australian Government will enable eligible businesses (<$50 million annual turnover) to deduct $120 for every $100 they spend on services and assets that support their digital capabilities, encompassing things such as new website design project expenses, web and app development costs, existing website upgrades, cloud computing and subscriptions, portable payment devices, e-invoicing, hosting services & CDN, IT security audits and cyber security systems. Business owners are also set to receive a 20% tax break on training, and digital upskilling related expenses.
The Treasurer has stated that this year’s Federal Budget is set to empower small business owners to use technology to grow their businesses, along with the launching of an initiative for small business owners to better respond to cyber security threats. They are set to now receive a 120% tax reduction on staff training expenses and external training course fees, helping their employees and business become more competitive and productive within their industry and specific niche.
In effect, this will grant businesses a $120 tax break for every $100 spent on training, however, there are strict conditions to this, such as, the courses must be provided to employees in Australia or online & must be delivered by registered Australian training entities. On-the-job and in-house training are not eligible for this reduction. Regarding our particular business offerings, this would apply to the provision of cybersecurity and website launch training.
In relation to iOnline’s Digital Marketing, SEO, eCommerce and website services, you are able to take advantage of these savings to cover expenses for existing website upgrades, re-designs and re-builds, new website design and web development projects, payment gateway integration and eCommerce solutions including digital inventory tracking systems. You will also be able to enjoy a considerable tax cut on subscriptions to enhance data analytics and marketing, hosting costs, website security systems and custom cloud applications.
Help Your Small Business Thrive with the New Skills & Training and Technology Investment Boosts!
This is fantastic and promising news to hear amid the extensive flooding emergencies in South East Queensland and Northern New South Wales as well as the longstanding effects of the COVID-19 pandemic on businesses across the nation. The additional tax deductions will be available for eligible spending incurred between the start of the Treasurer’s budget speech at 7:30pm AEDT on March 29, up until June 30, 2023, for technology investments, and June 30, 2024, for staff training.
As a broad view is being taken in relation to spending, as a small business owner, you will be able to enjoy a generous tax break for your computer hardware expenses, such as laptops, accounting software, portable payment devices and cloud-based services. Additionally, a 120% deduction for the costs incurred in updating your existing website or for getting a brand new website designed can also be claimed too.
Specifically, as a small to medium-sized business, clients will be able to enjoy major savings in relation to IT support, digital marketing and web-based services. Business owners will now be able to claim tax breaks for their website hosting, cloud computing services, related employee training, cyber security hardware and website design & development projects with iOnline.
One important thing for business owners to note is that whilst the government is providing a new, temporary 120% tax break for SME’s that invest in employee training, skills development or new technologies, it will not be further extending the temporary full expensing of equipment investments. This measure was initially introduced during the pandemic to encourage businesses to invest in new equipment, being able to write off the full cost of purchases against their tax in that year, rather than having to claim depreciation over many years.
As the instant tax deduction has not been extended, businesses will have to have installed or be using the new equipment by June 30, 2023, to claim full expensing. The two new measures are expected to cost the government around $550 million and $1 billion, respectively, over the four years of forward estimates.
Benefit From the Latest Budget Tax Breaks: Invest in Your Digital Footprint with iOnline!
The latest Federal Budget and tax breaks has been generally well-received by many key small business groups and is said to help take the immediate pressure off Australians and help them begin laying the groundwork for a more secure economic future. It has been said to represent a financial and strategic commitment to ensuring that small and family businesses are digitally enabled, resilient and have the support, incentives, skills and training needed to be truly competitive in the marketplace.
As part of a larger plan for a stronger future, these latest budget tax breaks announced as part of the Federal Budget 2022-23 could considerably help your small business elevate to new heights in the coming year. It is a fantastic time to invest in your business’s digital growth and take advantage of new technologies with the help of these major tax deductions! Here at iOnline, we can help you do just that! If you need assistance in choosing the right services or solutions to suit your company, don’t hesitate any longer – contact us today to speak with one of our friendly team members about our digital technology services!
iOnline would love to help your business thrive, with our range of professional Website Design & eCommerce Website Packages, Web Development, Cloud Computing Solutions and Digital Marketing services that will set you apart from your competitors! These latest budget tax breaks will allow your business to take full advantage of getting a brand new, professional & high-performing website designed and developed, reap the reward of fast hosting and cloud computing solutions, or enjoy the many benefits of a website overhaul & re-design by our talented and experienced web team!
We look forward to helping transform your online presence and assisting businesses like yours to grow to unimaginable new heights! Get in touch with us now to learn more about how this great Federal Government initiative can help you achieve your goals in 2022 and beyond!