On the 30th of April, the Federal Government announced the ‘Small Business Energy Incentive’ that will provide businesses with less than $50m turnover an additional 20% tax deduction for expenditure that supports electrification and/or more efficient energy use.

The Bill to give effect to this announcement was introduced into the House of Representatives on the 13th of September.

The Small Business Energy Incentive will be open for eligible expenditure during the 2023/24 financial year up to a maximum of $100,000.  This means that the bonus tax deduction is capped at $20,000.

This bonus deduction will be claimed when completing the annual income tax return for the 2023/24 financial year.

To be eligible for the bonus deduction, a cost must be for an eligible depreciating asset first used or installed ready for use, or an eligible improvement to a depreciating asset for which the cost is incurred, between 1 July 2023 and 30 June 2024.

A depreciating asset is eligible for the bonus deduction if:

  • it uses electricity and:
  • there is a new reasonably comparable asset that uses a fossil fuel available in the market; or
  • is more energy efficient than the asset it is replacing; or
  • if it is not a replacement, it is more energy efficient than a new reasonably comparable asset available in the market; or
  • it is an energy storage, time-shifting or monitoring asset, or an asset that improves the energy efficiency of another asset.

Whilst the start date of the incentive is listed as the 1st of July 2023, this is subject to the Bill being passed into law.  We will monitor and provide updates as the Bill progresses through Parliament.

In the meantime, businesses with questions about how they can get maximum value from the incentive should get in touch.

Sky Accountants Ballarat

Phone: 03 5332 8855

Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

Postal Address: PO Box 2234, Bakery Hill, Victoria 3354

Sky Accountants Gisborne & Macedon Ranges

Phone: 03 5428 1400

Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia

Postal Address: PO Box 270 Gisborne Victoria 3437

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