Home topics news Image credit: Kelly Sikkema News News SMEs urged to seize training and digitisation tax breaks Yajush Gupta June 26, 2023 Small businesses in Australia are being urged by Chartered Accountants Australia and New Zealand (CA ANZ) to seize a valuable tax incentive that allows them to deduct 120per cent of the costs associated with training employees and digitizing their operations. This incentive comes as recent legislation enabling the deduction was successfully passed by Federal Parliament. Susan Franks, CA ANZ’s Senior Tax Advocate, emphasized the significance of this incentive, especially in light of the ongoing worker shortages faced by small businesses. Franks pointed out that the 120 per cent deduction for employee training applies to expenses incurred by small businesses starting from March 29, 2022. “With small businesses facing worker shortages, the incentive to train new and existing staff is a great initiative,” said Ms Franks. However, businesses must meet specific criteria to qualify for the deduction and carefully consider the impact on their operations. Here are some key guidelines to keep in mind: Employee Training To take advantage of the tax incentive for employee training, small businesses need to adhere to the following: Exclusions: The incentive is not applicable to sole traders, partners, and independent contractors. Training Relevance: Businesses should choose training programs that are directly related to their employees’ roles within the organization. It is important to ensure that the training aligns with their specific job responsibilities. Failure to do so may result in potential Fringe