Small business skills and training boost
The small business skills and training boost provides a temporary bonus deduction to small businesses (with aggregated annual turnover of less than $50 million). Small businesses will be able to deduct an additional 20% on top of their ordinary deduction for expenditure they incur in providing eligible external training courses to employees through eligible registered training providers in Australia.
How to complete the trust tax return
You claim the bonus deduction as an expense subtraction at:
- item 5 Reconciliation items, Expense reconciliation adjustments (expense subtractions) using Worksheet 1.
Don't include the ordinary deduction for expenditure on your skills and training at item 5.
You also write the amount that you claimed at item 5 for the skills and training bonus deduction at:
- item 52 Small business bonus deductions.
The additional 20% bonus deduction is on top of your ordinary deduction for the cost of eligible training expenditure incurred between 7:30 pm (AEDT) on 29 March 2022 and 30 June 2024. It applies to enrolments or arrangements for the provision of training made or entered into at or after 7:30 pm (AEDT) on 29 March 2022.
If you are a small business entity, you must also meet the following criteria for the bonus deduction:
- expenditure must be for training employees, 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 of the provider's registration
- the eligible registered training provider must not be the small business or an associate of the small business, for example, a related entity or individual or a relative, spouse or partner of a related individual, and
- expenditure must already be deductible under the taxation law.
Expenditure for training persons other than employees is not eligible for the bonus deduction. For example, contractors and partner of a partnership are not eligible for the bonus deduction.
When to claim the bonus deduction
Special rules apply in claiming the bonus deduction for the eligible expenditure. It also depends on the balancing date if the small business has a substituted accounting period.
- Normal balancers
- For eligible expenditure incurred between 1 July 2023 and 30 June 2024, you claim the bonus deduction in your 2023–24 tax return.
- Late balancers
- For eligible expenditure incurred between the start of your 2023–24 income year and 30 June 2024, you claim the bonus deduction in your 2023–24 tax return.
- Early balancers
- For eligible expenditure incurred in your 2023–24 income year, you claim the bonus deduction in your 2023–24 tax return.
- For eligible expenditure incurred in your 2024–25 income year (up until 30 June 2024), you claim the bonus deduction in your 2024–25 tax return.
Steps to work out the amount to report at items 5 and 52A
Step 1: Enter at the primary production column, your temporary bonus deduction amount for the small business skills and training boost in respect of your primary production business at row x in Worksheet 1.
Step 2: Enter at the non-primary production column, your temporary bonus deduction amount for the small business skills and training boost in respect of your non-primary production business at row x in Worksheet 1.
Step 3: Add up your amounts at primary production and non-primary production at row x in worksheet 1.
Step 4: Transfer the amounts at row x in Worksheet 1 to item 5 Reconciliation items, Expense subtractions. Don't show cents. Also record this amount at item 52 – label A.
Small business energy incentive
The small business energy incentive provides businesses with an aggregated annual turnover of less than $50 million with access to a temporary bonus deduction equal to 20% of the cost of eligible assets or improvements to existing assets that support more efficient energy use.
The bonus deduction applies to the cost of eligible assets and improvements up to a maximum amount of $100,000, with the maximum bonus deduction being $20,000 per income year.
The bonus deduction is separate and additional to other deductions you would ordinarily claim under taxation law.
For more information, see Small business energy incentive.
You claim the bonus deductions as an expense subtraction at item 5 Reconciliation items, Expense reconciliation adjustments using Worksheet 1.
You also record the amount at item 52 Small business bonus deductions.
Don't include here your ordinary deduction for expenditure on assets or improvements eligible for the energy incentive.
Criteria for claiming the small business energy incentive
You must meet the following criteria for the bonus deduction:
- Your business needs to meet the aggregated annual turnover rules (with an increased 50 million threshold).
- The expenditure being claimed must be deductible to your business under other provisions in the taxation law.
- For expenditure on eligible assets, the asset must be both first used or installed ready for use for any purpose, and used or installed ready for use for a taxable purpose, between 1 July 2023 and 30 June 2024.
- For expenditure on improvements to existing assets, the expenditure must be incurred between 1 July 2023 and 30 June 2024.
- Neither the expenditure nor the asset is excluded.
You can't claim the bonus deduction for the cost of an eligible asset, or an improvement to an existing asset, if a balancing adjustment event occurs to the asset (for example, you sell it) during the income year in which you hold the asset and incur the expenditure, unless the balancing adjustment event is an involuntary disposal.
You calculate the bonus deduction as 20% of the cost of the eligible asset or improvement, irrespective of whether your ordinary deduction for the decline in value of the asset is claimed in one income year (under instant asset write off) or over its effective life.
Eligible assets
A depreciating asset may be eligible for the bonus deduction if it uses electricity and when one or more of the following apply:
- there is a new reasonably comparable asset that uses a fossil fuel available in the market
- the asset is more energy efficient than the asset it is replacing
- if it is not a replacement, it is more energy efficient than a new reasonably comparable asset available in the market.
A depreciating asset may also be eligible if it is an energy storage, time-shifting or monitoring asset, or an asset that improves the energy efficiency of another asset.
Eligible improvements
An improvement to a depreciating asset may be eligible for the bonus deduction if it:
- enables the asset to only use electricity, or energy that is generated from a renewable source, instead of a fossil fuel
- enables the asset to be more energy efficient, provided that asset only uses electricity, or energy generated from a renewable source
- facilitates the storage, time-shifting or usage monitoring of electricity, or energy generated from a renewable source (for example, a battery that stores electricity).
Excluded assets and expenditure
The following types of assets and expenditure are not eligible for the bonus deduction:
- assets and expenditure on assets that can use a fossil fuel (except if that use is merely incidental such as where an asset uses an oil-based lubricant)
- assets and expenditure on assets which have the sole or predominant purpose of generating electricity (such as solar panels)
- capital works
- motor vehicles (including hybrid and electric vehicles) and expenditure on motor vehicles
- assets and expenditure on assets allocated to software development pools
- financing costs, including interest and borrowing expenses.
When the bonus deduction is claimed
You will claim the bonus deduction in your 2023–24 tax return for eligible expenditure on depreciating assets that are both:
- first used or installed ready for use for any purpose between 1 July 2023 and 30 June 2024
- used or installed ready for use for a taxable purpose between 1 July 2023 and 30 June 2024.
For eligible expenditure on improvements to assets incurred between 1 July 2023 and 30 June 2024, you will also claim the bonus deduction for that expenditure in your 2023–24 tax return.
An entity with a substituted accounting period may claim the bonus deduction across more than one income year, provided the eligible asset was first used or installed ready for use, or the improvement cost was incurred, between 1 July 2023 and 30 June 2024.
Steps to work out the amount to report at items 5 and 52
Step 1 Show your bonus deduction for the small business energy incentive in respect of your primary production business at row Y in Worksheet 1 in the primary production column.
Step 2 Show your bonus deduction for the small business energy incentive in respect of your non-primary production business at row Y in Worksheet 1 in the non-primary production column.
Step 3 Add up your primary production and non-primary production at row Y in Worksheet 1.
Step 4 Transfer the amounts at row Y in Worksheet 1 to item 5 – Expense reconciliation adjustments (expense subtractions). Also record this amount at item 52 – label C. Don't show cents.
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