After a tough couple of years, small businesses were shown some support in the Australian 2022-2023 budget announcement. That night it was revealed that the Federal Government were making a significant investment into Australia’s tech sector through the Technology Investment Boost, which is an initiative that could potentially save your customers thousands of dollars.
Under the Technology Investment Boost, small businesses with an annual turnover of less than $50 million are able to claim a 120% deduction on costs associated with supporting their digital adoption, including expenses related to strengthening cybersecurity through products such as MailGuard.
To clarify, Treasurer, Josh Frydenberg stated that “every hundred dollars these small businesses spend on digital technologies like cloud computing, eInvoicing, cybersecurity and web design will see them get a $120 tax deduction.”
There are approximately 3.6 million Australian businesses under this threshold that could be eligible to claim this deduction, which covers expenditure incurred between 29th of March 2022 and 30th of June 2023. An annual spending cap of $100,000 will be applied for each business, and it’s estimated the boost will cost the government $1.6 billion in tax revenue.
In a recent analysis by Deloitte, it was noted that “across Australia there are 1 million businesses at the basic and intermediate levels of digital engagement who need help moving up the ladder”, with costs being nominated as the main barrier for digital adoption. With the introduction of initiatives such as the Technology Investment Boost, this barrier is reduced, and small businesses will hopefully be more inclined to embrace digitalisation.
You can find further details on the Technology Investment Boost here.
How to claim the Technology Investment Boost
For eligible expenditure incurred between 7:30 pm AEDT 29 March 2022 until 30 June 2022:
- Claim the expenditure as usual in your 2021–22 tax return, and
- 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:
- Deduct the entire 120% in your 2022–23 tax return.
Keeping businesses protected
Prevention is always better than a cure, and the best defence is to encourage businesses to proactively boost their company’s cyber resilience levels to avoid threats landing in inboxes in the first place. The fact that a staggering 94% of malware attacks are delivered by email, makes email an extremely important vector for businesses to fortify.
No one vendor can stop all threats, so it’s crucial to remind customers that if they are using Microsoft 365 or Google Workplace, they should also have a third-party email security specialist in place to mitigate their risk. For example, using a third-party cloud email solution like MailGuard.
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