$20k Deduction to ‘Electrify’ your business

Small businesses can get a tax break of up to $20,000 if they make their operations more energy-efficient.

The Government wants to support electrification and more efficient use of energy by small and medium businesses (with a turnover of less than $50 million).  The Government announced this measure on 30 April 2023 and the Bill is currently before the Senate. 

Eligible businesses can receive an additional 20% tax deduction on up to $100,000 of expenditure to improve energy efficiency. This tax break is only available for assets or upgrades first used and installed between 1 July 2023 and 30 June 2024. The incentive broadly applies to both new assets and upgrades to existing assets (conditions apply).

The basic criteria are that the new asset or upgraded asset must use electricity. Certain assets like solar panels and motor vehicles are excluded. If you’re considering this tax break, it’s essential to check with your accountant that your planned expenditure qualifies.

Some examples of eligible new or upgraded assets that may be eligible for the tax break are as follows:

  • Induction cooktops as a replacement for a gas cook top
  • More energy efficient fridges
  • Electric heat pumps
  • Replace a gas heater with an electric reverse cycle air conditioner
  • Even replacing the office coffee machine with a more energy efficient one!

If you are looking to make your business more energy efficient, please contact our office to discuss this measure further.

Arrange a meeting, and let’s see what the future may bring for your business.

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