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Budget Tax Breaks for Small Businesses Investing in Website Design

Great news for small businesses wanting to update or create a completely new website.

"From tonight, every hundred dollars these small businesses spend on digital technologies — like cloud computing, e-invoicing, cyber security and web design — will see them get a $120 tax deduction.

Budget tax breaks for small businesses investing in technology and skills

By business reporter Michael Janda

Posted Tue 29 Mar 2022 at 7:32pmTuesday 29 Mar 2022 at 7:32pm, updated Yesterday at 7:58amWed 30 Mar 2022 at 7:58am


The government has increased tax breaks for small and medium businesses investing in new technology and skills, but will not extend temporary full expensing of investments.

Key points:

  • The government will give temporary 120 per cent tax deductions for small and medium business spending on training and new technology

  • The government is not further extending the temporary full expensing of equipment investments

  • The budget commits $1.3 billion to businesses to help fund apprenticeships

The temporary full expensing measure was 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.

It was extended in last year's budget, at a short-term cost of nearly $18 billion, although the long-term cost would fall to $3.4 billion because it would reduce the amount of asset depreciation businesses could claim in future years.

However, that instant tax deduction has not been extended, meaning businesses will have to have installed or be using the new equipment by June 30, 2023, to claim full expensing. Instead, the government is offering a new, temporary tax break for businesses that invest in either new technology or employee training and skills development.

"Starting tonight, for every hundred dollars a small business spends on training their employees, they will get a $120 tax deduction, helping them become more productive and competitive," Treasurer Josh Frydenberg said in his speech.

Treasurer Josh Frydenberg said budget tax breaks would help businesses become more productive and competitive.(ABC News: Matt Roberts) "From tonight, every hundred dollars these small businesses spend on digital technologies — like cloud computing, e-invoicing, cyber security and web design — will see them get a $120 tax deduction.

"Investments of up to $100,000 per year will be supported by this new measure."

However, the additional training deduction only applies to courses delivered by external providers registered in Australia. The additional technology deduction applies to business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services. The two new measures are expected to cost the government around $550 million and $1 billion, respectively, over the four years of forward estimates.

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