If you are a business owner who invested in energy-saving measures during the past financial year, you may qualify for additional tax savings through the Small Business Energy Incentive. Designed for businesses with an annual turnover under $50 million, this government initiative is focused on providing tax advantages for investments made in energy-efficient technologies.
What is the Small Business Energy Incentive?
The Small Business Energy Incentive is a tax deduction program that rewards businesses who have invested in energy-saving assets and improvements during the ‘bonus period’ between 1 July 2023 and 30 June 2024. Eligible businesses could claim a bonus 20% tax deduction on expenditures up to $100,000, with a maximum deduction of $20,000.
Who is Eligible?
To qualify for the incentive, your business must meet the standard aggregated annual turnover, with an increased threshold of $50 million. This makes it accessible to a wide range of small to medium-sized enterprises (SMEs) across various industries.
Which Assets Qualify?
Eligible assets include:
- Energy-efficient appliances
- Electrifying equipment like air conditioners
- Energy storage systems
However, assets primarily designed for electricity generation, motor vehicles, and software development are excluded from the program.
How to Claim the Incentive?
If you’ve made investments in eligible assets or improvements during the 2023-24 financial year, consult with your accountant to ensure they include the bonus claim in your tax return.
Record-keeping Requirements
To support your claim, maintain accurate records of your expenditure and how the assets contribute to energy efficiency. This ensures compliance and makes the claiming process smoother.
Combining Benefits
For businesses with an annual turnover under $10 million, consider combining this incentive with the instant asset write-off available in the 2023–24 income year. This maximises your tax benefits and supports your business’s financial health.
Conclusion
The Small Business Energy Incentive presents a valuable opportunity for small and medium-sized businesses to benefit from significant tax savings. By leveraging this program, you can enhance operational efficiency, reduce costs, and contribute positively to environmental sustainability efforts.
We’re here to help
For further assistance or questions, please contact Chan & Naylor Pymble. We’re here to help you navigate the complexities of tax deductions and ensure you take full advantage of available incentives.
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Disclaimer
This article serves as general information only and may not account for the unique circumstances of individual readers. For personalised and strategic solutions tailored to your specific situation, we invite you to seek professional advice from Chan & Naylor. Our highly experienced team is dedicated to helping you navigate the complexities of Australian taxation, ensuring that your financial strategies align with the latest regulations. Contact us today to embark on a path of informed and customised tax planning for your property investments.
