We’re sure you’ve got lots of things in your toolbox, but when it comes to tax deductions, let us tell you what’s in ours.

A spotlight on available support for businesses

Since measures to support small businesses are being announced and passed into law frequently, it’s our job to put them in the spotlight. Keeping you up to date on these measures is especially important when they each have their own eligibility criteria and period for when you can claim.

Your eligibility is what qualifies you to claim a certain measure. For example, a measure might have eligibility criteria based on your aggregated turnover or specific spending.

 What’s currently law?

Did you know you may be able to ‘boost’ your deductions for eligible expenditure under two measures that became law on 23 June 2023?

If you have an aggregated annual turnover of less than $50 million, you could be eligible for:

• Small business skills and training boost – for training up your employees
• Small business technology investment boost – for going digital and operating digitally.

Both boosts allow you to claim an extra 20% tax deduction for eligible expenditure – on top of your normal deductions.

The boosts apply to eligible expenditure incurred from 7:30pm AEDT on 29 March 2022.

The technology investment boost finished on 30 June 2023. This means any additional purchases you’ve made after this date won’t be eligible for the extra 20% deduction. Although, if you did make any eligible purchases between 29 March 2022 and 30 June 2023, check if you can claim it in your tax return or make an amendment.

However, the skills and training boost is open until 30 June 2024, so there’s still time to make investments in that area, if you haven’t already.

Find out more at: ato.gov.au/skillstrainingboost, ato.gov.au/technologyboost

What’s in the pipeline?

The Australian Government has some measure still in the works, including the small business energy incentive and the instant asset write-off. They’re not law yet. The energy incentive offers an extra 20% tax deduction for eligible expenditure on assets or improvements that support more efficient energy use.  It applies for businesses with an aggregated turnover of less than $50 million. If it becomes law, it will be available between 1 July 2023 and 30 June 2024.

If you have an aggregated turnover of less than $10 million, you could also be able to claim the instant asset write-off on eligible assets and improvements costing less than $20,000. This measure, if it becomes law, will be available between 1 July 2023 and 30 June 2024.

Before you claim these support measures, make sure you know when the expense needs to be incurred, what you can claim and if you’re eligible.

 Find out more at: ato.gov.au to search ‘Energy Incentive’ or ‘Instant Asset Write-Off’

To keep updated on the current measures and find out when more become available, sign up for our Small Business newsletter.

Find out more at: ato.gov.au/sbnewsroom

Nail the golden rules

The 3 golden rules for allowable tax deductions stay the same, even when the expenses relate to a bonus deduction. They are:

1. The expense must have been for your business – not for private use.
2. If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.
3. You must have the records to prove it.

Business expenses may include motor vehicle, travel, legal, digital, and home-based business expenses. However, they must directly relate to earning your business’s assessable income.

Find out more at: ato.gov.au/businessdeductions

No spanner in the works with good records

Good records are vital to have, so your glovebox might not be the best filing cabinet.

Not only can they act as a reminder for what you can claim for that income year, you also need records to show how you calculated your deductions. They don’t just make it easier to meet your tax and super obligations but can help you keep track of how well your business is doing in terms of cashflow.

That’s why it’s important to follow these 5 rules to keep your records in working order:

1. Keep all records related to starting, running, changing, and selling or closing your business that are relevant to your tax and super affairs.
2. Do not change information in your records. Store them safely to prevent damage and protect information from being changed.
3. Keep most records for 5 years and know which records to keep longer. You’ll need to keep records longer if they’re connected to a future, corrected, or amended return, or records about depreciating or capital gains tax assets.
4. Be able to show us your records if we ask for them.
5. Ensure your records are in English or can be easily converted to English.

If your tax records are damaged, destroyed or lost, we can help you reconstruct them.

Make sure you have a system for reviewing, updating, and destroying records as required throughout the year.

Find out more at: ato.gov.au/recordkeeping