Federal Government Tax Incentive Helping Small Businesses Go Digital

This year in Australia, the combination of new tax deductions related specifically to digital spending is going to benefit small and medium-sized businesses (SMBs) more than any other sector, with the government pledging $1 billion in tax deductions for companies with annual revenue of less than $50 million.

According to a Sydney Morning Herald report in March this year, eligible businesses must spend up to $100,000 a year on digital assets, including cybersecurity systems, websites, cloud computing, or portable payment devices.

This boost to small business will equate to an additional 20% deduction on expenses relating to digital investment and will apply to spending from 29 March 2022 until 30 June 2023.

Read more about the scheme here.

What Digital Expenses Can My Business Claim?

Under the conditions of the new scheme, more than 3.6 million small businesses will be able to claim 120% against expenses and depreciating assets that support “digital adoption”.

This will include:

  • Cybersecurity
  • cloud computing
  • eInvoicing
  • web design
  • subscriptions to cloud-based services
  • portable payment devices

When and How to Claim the Technology Investment Boost

Relating to all eligible digital expenses and assets purchased from 29 March 2022 through 30 June 2023, making a claim under the new Technology Investment Boost scheme is straightforward.

The ATO recommend following these simple steps:

  • claim the expenditure as usual in your 2021–22 tax return
  • claim the additional 20% bonus deduction for this period in your 2022–23 tax return

For eligible expenditure incurred from 1 July 2022 until 30 June 2023 you can deduct the entire 120% in your 2022–23 tax return.

Why All Businesses Need to Go Digital

While the new scheme gives companies a serious push to invest in digital adoption across all aspects of their business, it’s truly never been a smarter or better time to go online.

The impact and consequences of COVID-19 are ongoing, with many people still working at least partly from home, and some businesses remaining online permanently due to the myriad benefits of a digital presence.

Shrinking overheads and fewer losses combined with greater flexibility for consumers has enabled digital businesses to thrive.

Customer expectations of global access and service, and workplace ability to hire the best people for their roles, no matter their location, has further cemented the need for digitisation of processes, operations, security, and more.

Digital is the future for all businesses, no matter the size or sector.

How can FortiTech help?

We specialise in Cybersecurity for small and medium businesses, going digital opens up businesses to more threats from cyber criminals. Which is where we come in, we can design and implement a cybersecurity and business continuity solution to suit your needs, budget and compliance requirements.

Get in contact today to find out how we can help protect your business.