As at the announcement (29 March 2022) to 30 June 2023, small businesses are set to receive a 20% additional tax deduction on business expense and depreciating assets that adopt digital workplace software or services such as portable payment devices, cyber security, cloud subscriptions and, most exciting as far as we’re concerned, website development.
These deductions apply to up to $100,000 annual expenditure and are eligible to businesses with an aggregated turnover of less than $50m.
This means that, without meaning to sound like a 1990s knife salesperson, there is genuinely no greater financial year to include the development of a new website, to keep up with your competition and future proof your business.
Essentially, for every $100 you spend on eligible digital services or software, you get a $120 tax deduction.
For context, based on the base tax rate of around 27.5% for this eligible group, you can get roughly 33% of the cost of a new website back on tax. This is thousands, even tens of thousands, of dollars in savings on something you will invariably need in the future anyway.
While we’re unmistakably passionate about the requirement of digital for all businesses, there are other areas small businesses can grow within this tax cut.
For the same time period, small businesses can deduct the same 20% of expenditure on external online and registered Australian training courses (so, not in-house or on-the-job training) for employees in Australia.
These budget tax cuts correlate with the $20,000 Business Growth Grants that are further working to future proof small businesses.
If investing in a website is an avenue you’re reading to take advantage of with this Budget announcement, contact us today to discuss the process.
Main image by Fabian Blank on Unsplash