- Allows eligible small businesses to claim an extra 20% tax deduction for approved skills and training expenses
- Legislation has just passed, on 23 June 2023, and is backed dated to capture expenses paid between 29 March 2022 and 30 June 2024
- Must already be a deductible expense for your business
- Must be for employees of the business
- The training provider must meet certain registration criteria for the bonus deduction. You can check for registered providers at training.gov.au.
- Talk to your Accountant
As a small business owner, staying up-to-date with the latest skills and knowledge is essential for staying competitive in today’s rapidly evolving business landscape. The Australian Taxation Office (ATO) recognizes the importance of continuous learning and has introduced the Small Business Skills and Training Boost (SBSTB) program.
In this blog post, we’ll explore how this initiative can benefit small business owners like you and help you thrive in your industry.
Overview of the Small Business Skills and Training Boost Program:
The Small Business Skills and Training Boost program, launched by the ATO, aims to encourage small businesses to invest in training and upskilling their workforce. The initiative provides eligible businesses with tax incentives and deductions to offset the costs associated with employee training and development.
To qualify for the program, your business must meet specific eligibility criteria.
- These include having an aggregated annual turnover of less than a certain threshold (currently set at $50 million)
- Training must be provided to payroll EMPLOYEES of your business, either in-person or online.
- Charged to your business or employee by a registered external training provider, that is not an associated business of yours. (you can’t train your own staff). You can check for registered providers at training.gov.au.
- Expense is incurred within a specified period (between 7:30 pm AEDT or by legal time in the ACT on 29 March 2022 and 30 June 2024).
It’s important to review the ATO’s guidelines and requirements to determine if your business qualifies for this program. ATO has a page dedicated to SBSTB
Available Deductions and Tax Incentives:
By participating in the Small Business Skills and Training Boost program, you can enjoy various deductions and tax incentives. These include immediate deductions for the cost of training courses, materials, and other related expenses. The ATO allows deductions for both the training fees and associated incidental costs, such as travel and accommodation.
Covered Training and Development Activities:
The program covers a wide range of training and development activities. These can include attending industry conferences, workshops, seminars, and formal training programs. It’s important to note that the training must be relevant to your business operations and directly contribute to improving your employees’ skills and knowledge.
Benefits for Small Business Owners:
Participating in the Small Business Skills and Training Boost program can have several advantages for small business owners. Firstly, it enables you to invest in the ongoing development of your employees, leading to improved productivity and efficiency within your organization. Secondly, by taking advantage of the available deductions and incentives, you can reduce your tax liabilities and free up funds for further investment. The extra deduction is within your business income tax return. It does not show on your Financials.
How to Apply: Talk to Your Accountant Early
To take advantage of this program, you need to follow a few steps.
- Begin by checking your eligibility on the ATO website and familiarizing yourself with the program’s requirements.
- Talk to your Accountant – to ensure you are eligible AND to make sure you are tracking the expenses in the right manner.
- Next, ensure your training activities meet the criteria set by the ATO and keep detailed records of all expenses incurred. This includes copies of invoices AND confirmation that the provider of training is Registered. You can check for registered providers at training.gov.au.
- Finally, when filing your tax returns, claim the deductions and incentives as per the guidelines provided. Speak to your business Accountant with the required information from step 2 above.
Investing in skills and training is crucial for small business growth and success. The Small Business Skills and Training Boost program offered by the ATO provides valuable incentives and deductions for small business owners looking to upskill their employees and stay competitive in their industry. By taking advantage of this program, you can enhance your business’s capabilities, improve productivity, and reduce your tax burden. Don’t miss out on this opportunity to invest in your business’s future.