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Do you know you may get a 20% tax bonus in your accounting software program and different digitisation bills?


Do you know you may get a simple tax enhance by claiming a bunch of bills incurred within the digitisation of your small enterprise?

The federal authorities and the ATO are eager for small companies to undertake newer know-how and higher and extra modern methods of doing work. That will help you out, there’s some juicy incentives being dangled.

It’s known as the ‘small enterprise know-how funding enhance’, and could be claimed for quite a lot of digitalisation bills, together with your accounting software program, however a heck of much more too…

So, what’s the small enterprise know-how enhance?

In line with the ATO:

“Small companies with an aggregated annual turnover of lower than $50 million can be allowed a further 20% tax deduction to help their digital operations and digitise their operations.”

The 20% know-how enhance could be utilized to eligible expenditure incurred between 29 March 2022 and 30 June 2023.

The know-how enhance is designed for eligible technology-based enterprise bills and depreciating property and is capped at $100,000 per earnings yr. Which means the 20% will provide you with a most bonus deduction of $20,000 per earnings yr.

Eligibility standards

To be eligible, it’s essential to be an Australian small enterprise with a turnover lower than $50 million. The expense in query have to be already a deductible expense below present tax legal guidelines and the expense should have been incurred between 29 March 2022 and 30 June 2023.

What’s included within the small enterprise know-how funding enhance?

So, what precisely are you able to declare? Whereas the ATO has given guides and examples, it has not offered an exhaustive listing. Nevertheless. It ought to be comparatively simple to determine what’s eligible by way of, and your accountant or tax agent can actually pick any ineligible claims earlier than they go any additional.

The type of claims you can also make:

  • Digital enabling gadgets and gadgets– gadgets that help digitisation reminiscent of computer systems, telephones, software program, web prices, methods and companies.
  • Digital media and advertising and marketing – audio and visible content material that may be created, accessed, saved or seen on digital gadgets, together with internet web page design.
  • eCommerce – any items or companies which help digital or on-line ordering or different on-line transactions. This additionally consists of transportable cost gadgets, POS know-how, digital stock administration, subscriptions to cloud-based companies and recommendation on digital operations or digitising operations.
  • Cybersecurity – You may also declare any cybersecurity methods or know-how you put money into, in addition to backup administration and monitoring companies.

Why is small enterprise digitisation being inspired?

There’s a bunch of explanation why the federal government is encouraging and subsidising the uptake of cloud software program, newer tech, and extra environment friendly methods of working.

Though not specified by the ATO, the current 2023 Intergenerational Report pointed to the necessity for modernisation and digital tech uptake to climate the financial storm that can hit over the following 4 a long time as an ageing inhabitants attracts on public funds. This may imply that an modern and environment friendly non-public sector will should be cultivated. The federal government desires to encourage this to create a stronger financial system.

Then there’s extra direct causes – for those who look to initiatives like Single Contact Payroll, you’ll see that the payroll reporting course of has been simplified and automatic by way of the mandated use of cloud payroll software program. You’ll be able to then look to different digital initiatives like myGov to see a broader transfer towards software program reporting and digital file retaining – we’re actually going to see extra of this, so encouraging digitisation now makes good sense.

It’s additionally about competitiveness. A enterprise that embraces higher methods of working and higher options can be extra environment friendly and aggressive – that means enterprise will thrive extra simply, aiding small enterprise house owners in addition to the financial system as an entire.

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