The ATO is generally making an effort to promote more sustainable business practices for the future, and part of this includes an energy incentive that’s directed towards small businesses in particular.
This announcement was made on the 30th of April 2023, and the main takeaway here is that you’ll receive a financial boost if you’re a business that makes less than $50 million each year and invests in electrification and energy efficiency.
Eligibility and Time Frame
Another thing I noticed here is that you’ll be eligible for an additional 20% tax deduction – which is not something to turn your nose up at if you’re a small business – on any eligible expenditure that you’ve incurred during what they call the ‘bonus period’, which basically ranges from the 1st of July 2023 to 30th of June 2024 (including both new and recently upgraded assets).
Eligible Investments
Again, the main idea here is that you’re using this energy incentive to make new upgrades that are a lot more energy-efficient:
- Upgrading/electrifying your HVAC Systems
- Upgrading to More Efficient Appliances
- Installation of Batteries and Heat Pumps
Financial Benefits
The biggest takeaway here is that you’ll receive a major tax bonus if you’ve upgraded new assets within that period – up to a whopping $100,000. The same goes for that bonus tax deduction we mentioned earlier, as you can receive around $20,000 per business.
I try to think of this as effectively a reduction in your taxable income by around 120% of the amount that you spend on any of the qualifying investments (the ones we just mentioned), so needless to say, it lowers your overall tax burden.
Contact Advisory One Today
Interested in learning more about how you can maximise your benefits here and qualify for that 20% tax deduction? Get in touch with our team of chartered accountants by calling 02 6324 5888.
Recent Comments