Massive investments, a cash splash and a tax-time surprise have headlined the 2022 Federal Budget that was announced recently. Interlease has unpacked the pros and cons of the latest Federal Budget and how this may benefit or affect our clients.

The good news is, there is a tax break for small businesses investing in technology, however the government will not extend temporary full expensing of investments.

The temporary full expensing measure was introduced during the pandemic to encourage businesses to invest in new equipment, being able to write off the full cost of purchases against their tax in that year, rather than having to claim depreciation over many years.

However, that instant tax deduction has not been extended, meaning businesses will have to have installed or be using the new equipment by June 30 2023, to claim full expensing.

Instead, the government is offering a new, temporary tax break for businesses that invest in either new technology or employee training and skills development.

Now, every hundred dollars small businesses spend on digital technologies like cloud computing, e-invoicing, cyber security and web design will return a $120 tax deduction. Investments of up to $100,000 per year will be supported by this new measure. The additional tax deduction will be available for eligible spending incurred between March 29 and June 30 2023, for technology investments and June 30 2024, for staff training.

However, the additional training deduction only applies to courses delivered by external providers registered in Australia. The additional technology deduction applies to business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services.

The two new measures are expected to cost the government around $550 million and $1 billion respectively, over the four years of forward estimates.

All in all, business groups have long called for tax relief targeted at Australian firms undertaking a digital transition, claiming such enticements will reap dividends in the long run.

Are you thinking about purchasing equipment for your business and need help with financing? Here at Interlease, our experienced brokers will find the best finance solution for you. Call us on 1300 859 429 to learn more.