What is it?
The Skills and Training Boost allows eligible small businesses to claim a bonus tax deduction of 20% on top of the allowable deductions already available for training their employees. This applies to eligible costs incurred for a broad range of training provided to their employees by a registered training organisation (RTO) in Australia.
This means that for every $100 you spend on upskilling your employees with training, you will get a $120 tax deduction!
Who receives this bonus?
Small businesses with an aggregated annual turnover of less than $50 million will be able to deduct an additional 20% of expenditure incurred on eligible training courses provided to employees.
When does it apply?
It applies to expenditure incurred between 7:30pm AEDT 29 March 2022 until 30 June 2024.
Based on the exposure draft legislation and associated explanatory materials, it is anticipated special rules will apply to when the bonus deduction can be claimed in tax returns depending on a business’s balancing date.
It is important to note that these measures are not yet law. The legislation is still in exposure draft.
Eligible expenditure for the bonus deduction
The bonus deduction is available to eligible small businesses that incur expenditure which meets the following criteria:
- expenditure must be for training employees, either in-person in Australia, or online;
- expenditure must be charged, directly or indirectly, by a registered training provider and be for training within the scope (if any) of the provider’s registration;
- the registered training provider must not be the small business or an associate of the small business;
- expenditure must already be deductible under the taxation law.
As Future Institute is a Registered Training provider with three qualifications currently on scope, you could be training your supervisors and managers now with a 120% tax deduction.
Sources:
Treasury, Treasury Laws Amendment (2022 Measures No. 4) Bill 2022; https://treasury.gov.au/consultation/c2022-305552
2022 Federal Budget, Budget Paper No 2
ATO, https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Small-Business-Technology-Investment-Boost-and-Small-Business-Skills-and-Training-Boost/
