By Peter Debus
Guest blog from Peter Debus, Director, PrincipleFocus, outlines the benefits the new Australian Federal Government budget offers for farmers embracing new technology.
“These tax measures and others enabling the write off of farm machinery will cause many farm businesses to invest and implement new solutions such as Figured.”
The Australian Federal Government budget was announced by the Treasurer Josh Frydenberg on 29 March 2022. He announced an inducement to small businesses to digitalise their operations and spend more on staff training.
Small businesses will be able to deduct 120 per cent “of the cost of business expenses and depreciating assets that support digital uptake, up to $100,000 of expenditure per year’’.
It had been reported in the financial review by Karen Maley, Columnist that the treasury is taking a very broad view of what spending will be eligible for the deduction. As a result, small businesses will be able to claim the generous tax break for their spending on laptops, accounting software, portable payment devices and for their subscriptions to cloud-based services such as Xero, Figured, Agworld etc. What’s more, small businesses can also claim the 120 per cent deduction for the costs they incur in updating their websites, or else for setting up a website for the first time.
The temporary increased deduction will be available to small businesses with an aggregated turnover of less than $50 million for eligible expenditure incurred between 7:30pm (AEDT) on 29 March 2022 and 30 June 2023, subject to an annual cap of $100,000 in each qualifying income year.
The Treasurer also announced that eligible small businesses will be able to claim an extra 20% (allowing them to claim 120%) of the expenditure incurred on external training courses provided to their employees. Eligible small businesses will be able to claim an extra 20% (allowing them to claim 120%) of the expenditure incurred on external training courses provided to their employees.
The farm sector is booming with wonderful seasonal conditions in most regions, exceptional commodity prices and low interest rates - it’s rare that they align. These tax measures and others enabling the write off of farm machinery will cause many farm businesses to invest and implement new solutions such as Figured. Those solutions will support finance for farm expansion, build resilience and adaptability for the next drought and enable businesses to “stay in control and on track”.
Peter Debus is a director of PrincipleFocus, a Chartered Accountant and Chartered Tax Adviser.
The team at PrincipleFocus builds dynamic, innovative, growing businesses that work for you. We are more than just accountants, we are effective outcome-driven professionals, enhancing businesses in regional Australia. We are well-versed in Australia’s fluctuating economic conditions, its unpredictable climate and variable commodity prices. With these factors significantly impacting your business, we will guide you towards the best course of action. Get in touch with us today here.