When we think of investing in technology, we usually think of high-cost software that large businesses use to automate processes, track data, and streamline operations. However, smaller businesses can also reap the benefits of a tech and system upgrade, thanks to the Federal Governments Technology Investment Boost.
Josh Frydenberg, Treasurer of Australia, shared as part of the Federal Budget for 2022 the Technology Investment Boost. The boost is to include targeted concessions to encourage businesses to embrace digital transformation with a focus on Software as a Service (SaaS) solutions.
He also shared that this boost is an opportunity for businesses to embrace the digital revolution, become more productive and drive business growth. The Australian government has identified that the digital economy is key to securing their economic future and recovery from COVID-19. The Technology Investment Boost forms part of the Digital Economy Strategy which will work towards job improvements, increased productivity and making the Australian economy more resilient.
With that in mind, here’s everything you need to know about the Technology Investment Boost for Small Businesses.
What is the Australian Technology Investment Boost?
The Australian Technology Investment Boost (or ATIB for short) is a government program that gives tax incentives for businesses to invest in new technology. Businesses can claim a bonus of 20% for the cost of expenses and depreciating assets. They will be able to claim 120% of the costs as part of budget measures. Incurred costs can be deducted from the taxable revenue at an amount greater than what was spent.
Why invest in technology?
The short answer is that it boosts productivity. As small businesses grow, they find that a lot of the time is spent managing routine tasks that don’t have much impact. This can be a waste of time, money, and staff resources. Investing in technology can help eliminate some of these hassles and free up time to focus on more strategic tasks. Investing in technology also allows businesses to stay competitive in today’s market.
Who can claim the Technology Investment Boost?
Businesses with an annual turnover of less than $50 million can take advantage of tax deductions when spending on new technology.
How much can be claimed and until when?
The Technology Investment Boost has an annual cap of $100,000 and is set to last until 30 June 2023.
What technologies can I claim on?
Businesses can claim on technologies such as portable payment devices, cybersecurity systems and subscription services to cloud-based services, including ERPs and inventory management systems.
How can I claim the Technology Investment Boost?
If you have eligible technology expenditure, you can claim it in your tax return.
Technology is a key enabler for business operations. It can help your company reduce costs, improve productivity, and meet customer expectations. To reap the benefits of technology, though, you need to make sure that you’re making the right investments. Technology should be considered an investment in the long-term growth of your business. This means that you should consider the costs and the return on these investments. Before making any technology investments, make sure that they will help your company grow and be more productive.
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