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Federal Budget 2022-23: Small business

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The government has announced a wide range of funding for small businesses with key measures aimed at providing tax incentives to digitise operations and upskill and train employees. This is in addition to cash flow support and additional support packages.

Skills and training boost

The Government will introduce a skills and training boost to support small businesses to train and upskill employees.

Small businesses with aggregated annual turnover of less than $50 million will receive a $120 tax deduction for every $100 they spend on external training courses provided to employees.  The external training courses must be provided to employees in Australia or online, and delivered by entities registered in Australia. Some exclusions will apply (such as for in‑house or on‑the‑job training and expenditure on external training courses for persons other than employees).

The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 until 30 June 2024.  The boost for eligible expenditure incurred before 30 June 2022 can be claimed in tax returns for the FY23 income year. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2024, will be included in the income year in which the expenditure is incurred.

Technology investment boost

The Government has announced a technology investment boost to support digital adoption by small businesses.

Small businesses with aggregated annual turnover of less than $50 million will receive a $120 tax deduction for every $100 spent on business expenses and depreciating assets that support their digital adoption (e.g. portable payment devices, cyber security systems, subscriptions to cloud‑based services etc). An annual cap of $100,000 will apply in each qualifying income year.

The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 until 30 June 2023. The boost for eligible expenditure incurred before 30 June 2022 can be claimed in tax returns for the FY23 income year. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2024, will be included in the income year in which the expenditure is incurred.  

Small business support package

The Government will provide $25.2 million over 3 years from 2021-22 to deliver initiatives to support small businesses. Funding initiatives include:

  • $10.4 million over 2 years from 2022-23 to enhance and redesign the Payment Times Reporting Portal and Register to improve efficiency and reporting.
  • $8.0 million in 2022-23 to the Australian Small Business and Family Enterprise Ombudsman to work with service providers to enhance small business financial capability.
  • $4.6 million over 2 years from 2021-22 to support the New Access for Small Business Owners program delivered by Beyond Blue to continue to provide free, accessible, and tailored mental health support to small business owners.
  • $2.1 million over 2 years from 2021-22 to extend the Small Business Debt Helpline program operated by Financial Counselling Australia to continue to provide financial counselling to small businesses facing financial issues.

Cash flow support

The GDP uplift factor for pay as you go (PAYG) and GST instalments will be reduced to 2% for small business for the 2022-23 income year. This uplift factor is lower than the 10% that would have applied under the statutory formula.

This will mean lower tax instalments for businesses, which will provide cash flow support to small businesses (including sole traders and other individuals with investment income).

The lower uplift rate will apply to small to medium enterprises eligible to use the relevant instalment methods (up to $10 million annual aggregated turnover for GST instalments and $50 million annual aggregated turnover for PAYG instalments) in respect of instalments that relate to the 2022-23 income year and fall due after the enabling legislation receives Royal Assent.

Additional small business measures

A range of additional measures for small businesses have been announced. These include:

  • $5.6 million over 4 years from 2022-23 for the Fair Work Commission to establish a dedicated unit to support small businesses, including with unfair dismissal and general protections disputes.
  • $5.4 million over 2 years from 2021-22 to existing legal assistance services operating within QLD and NSW to support flood affected individuals, small businesses and primary producers to access timely legal assistance as required.
  • $0.8 million in 2023 to expand the Regional Small Business Support program to support flood impacted small businesses in northern NSW and southern Queensland through to 30 June 2023.
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