Small businesses are set to benefit from a new tax incentive announced by the Australian government. The Small Business Energy Incentive is aimed at helping small- and medium-sized businesses save energy and reduce their energy bills. In this article, we will explain what the Small Business Energy Incentive is and how it works.
What is the Small Business Energy Incentive?
The Small Business Energy Incentive is a tax incentive that will provide businesses with an annual turnover of less than $50 million an additional 20% deduction on spending that supports electrification and more efficient use of energy. The incentive is designed to help small businesses make investments in energy-efficient upgrades, such as electrifying their heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.
How Does the Small Business Energy Incentive Work?
The maximum bonus tax deduction available under the Small Business Energy Incentive will be $20,000 per business, and up to $100,000 of total expenditure will be eligible for the incentive. Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. The incentive is expected to cost $314 million over the forward estimates.
Who is Eligible for the Small Business Energy Incentive?
To be eligible for the Small Business Energy Incentive, a business must have an annual turnover of less than $50 million. The incentive is available to all small- and medium-sized businesses in Australia, including tradies, manufacturers, restaurants, hairdressers, real estate agents, and other small businesses.
Conclusion
The Small Business Energy Incentive is a new tax incentive designed to help small- and medium-sized businesses save energy and reduce their energy bills. The incentive provides businesses with an additional 20% tax deduction on spending that supports electrification and more efficient use of energy. Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. The Small Business Energy Incentive is expected to cost $314 million over the forward estimates and will be available to all small- and medium-sized businesses in Australia.
If you’d like to discuss this with us, feel free to contact us.
