It’s a great headline isn’t it? Spend $100 and get a $120 tax deduction. Days after the Federal Budget announcement that businesses will
be able to claim a 120% deduction for expenditure on training and technology costs, we started receiving marketing emails encouraging us
to spend now to access the deduction.
But, there are a few problems. Firstly, the announcement is just that, it is not yet law. And, given the Government is in caretaker
mode for the Federal election, we do not know the position of the incoming Government on this measure. And, even if the incoming
Government is supportive, we are yet to see draft legislation or detail to determine the practical application of the measure.
What happens if i have already spent money on training and technology in anticipation of the bolstered deduction?
If the measure becomes law, and the start date of the measure remains the same, we expect that any qualifying expenditure incurred in the 2021-22 financial year will be claimed in your tax return. But, the ‘boost’, the extra 20% will not be claimable until the 2022-23 financial year.
If the measure does not come to fruition, you should be able to claim a deduction under normal rules for the actual business expense.
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