What you need to know about expanding your small business
The 2022 Federal Budget is here and, with it, a collection of incentives designed to ease pressure on small businesses and boost productivity.
So that you’re across what’s up for grabs for small businesses (that’s those with an annual turnover of less than $50 million), we’ve compiled a list of the key tax and hiring incentives this year’s budget is serving up.
Technology investment boost
Small businesses will be able to deduct 120 per cent from what they spend on technology investments, up to a total of $100,000 expenditure per year (until 30 June 2023). This deduction will be eligible on laptops, accounting software, portable payment devices, such as our Tyro EFTPOS machines and cloud-based subscriptions, as well as costs involved in setting up or updating their website.
Skills and training boost
Designed to entice more small businesses to upskill their staff, owners will be able to deduct 120 percent on external training courses for their employees. To clarify, this doesn’t include in-house or on-the-job training, but rather sending staff to eligible training providers.
This incentive can be claimed up until 30 June 2024.
To boost apprenticeship uptake and employee retention in the face of skills shortages, a further $2.8 billion will be invested in Australian apprenticeships. This will form part of a new, streamlined Australian Apprenticeships Incentive System that will provide wage subsidies (of up to $15,000) to businesses that take on trainees in priority trades, such as carpentry.
This comes as good news to small businesses who may have relied on the Boosting Apprenticeships Commencements scheme.
Pay less PAYG Tax
Under the 2022 Federal Budget, small businesses can expect to pay lower PAYG taxes for the next financial year. With a proposed reduction of the GDP uplift rate from 10 per cent to 2 per cent, the hope is to temporarily boost the cashflow of around 2.3 million businesses.
Other small business boosters
There are several other investments included in the 2022 Federal Budget, implemented with the hope of making doing business easier for owners. These include:
- $4.6 million to extend the New Access for Small Business Owners program—an initiative delivered by Beyond Blue to provide free, accessible and tailored mental health support to small business owners
- $5.6 million towards a dedicated small business unit in the Fair Work Commission, making it easier for owners to meet workplace obligations
- $8 million towards the Australian Small Business and Family Enterprise Ombudsman; this will give owners easier access to expert advice such as business planning, capacity building, and financial literacy
- $2.1 million for Financial Counselling Australia’s Small Business Debt Helpline, giving owners easy access to financial advice
On a personal note
We understand that personal costs are just as important as business costs when you’re a small business owner. In an effort to relieve pressure on Australians as inflation continues to rise, the Federal Budget 2022 includes a range of cost-of-living incentives.
In a nutshell, these include:
- halving fuel excise for six months, from March 30 this year (this means cutting excise on petrol and diesel from 44.2 cents per litre to 22.1 cents per litre)
- providing over 10 million individuals with a one-off $420 cost-of-living tax offset
- reducing the concessional and general PBS Safety Net thresholds, so around 2.4 million Australians can buy medicines for less
To find the cost of living support available to you, head over to the official budget website and answer these three questions.
It’s also worth noting the overhaul of parental leave under the Federal Budget 2022. Set to be introduced by March 1, 2023, two-parent households will now be able to split 20 weeks of paid parental leave as they please, instead of the primary carer being eligible for 18 weeks and the secondary caregiver being eligible for two; the changes will also allow fathers to access parental leave at the same time as any employer-funded leave, as mothers currently can. In addition, single parents will be able to access the full 20 weeks of paid parental leave, which is two more than the current 18 weeks.
Want to learn more about the 2022 Federal Budget? Read on here.
Tyro provides this article for general information and educational purposes and does not take into account the financial situation or needs of any reader. The information provided must not be relied upon as financial product advice. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.