Wait till 1 July 2023 to act on efficiencies in your business

The Treasurer has announced is first budget leak… The Small Business Energy Incentive.

The 20% bonus tax deduction for businesses with annual turnover of less than $50 million applies to spending that supports electrification and more efficient use of energy. This could cover the cost of electrifying heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.

Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.

Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.

So if a business has a turnover under $50 million, do not do any of the following until 1 July 2023…

  • install electric heating and cooling;
  • Upgrade fridges;
  • Install induction cooktops;
  • Installing batteries;
  • Install heat pumps.

If you wait till 1 July the Government will effectively fund 9% of the cost (extra 20% deduction x tax rate – generally 25% = 9%)


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